OFT clears housebuilders of landbank allegations

The Office of Fair Trading (OFT) has cleared housebuilders of allegations that they hold landbanks to prevent competition or halt developments.

An investigation into the financing of housebuilders found that a pipeline of land was essential to their ability to maintain build and sale programmes.

It found that firms look to start work on site as soon as possible to avoid the risk of losing profit through the holding costs of land.

A spokesman for the Home Builders Federation said it had finally "exploded the myth" surrounding landbanks once and for all.

Federation of Master Builder's director of external affairs Brian Berry said developers had long been accused of dodgy dealings by holding land back.

He said: "It knocks the nail on the head of accusations that builders store up land. A lot of interest groups had been saying the reason we don't have enough houses is because builders hold land back.

"They would try to put it back on developers, but this report says that is not the case at all."