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New OFT threat to housing firms

The Office of Fair Trading is concerned over the lack of cooperation its investigation into house building is getting

The Office of Fair Trading will call in the Competition Commission if it fails to get enough answers from its investigation into the £20 billion house building sector.

The Commission, which oversees rules governing mergers, markets and regulation, will step in to force firms to hand over information.

OFT senior team leader Simon Nichols said: “The house building market is not working at the moment for consumers.

“We can call in the Competition Commission if we don’t get a suitable response to the survey.”

The OFT has sent out questionnaires to 7,000 builders. At least 700 responses are needed for the survey to be measured as statistically valid.

The mainly multiple-choice survey wants to hear if firms have building warranties, standards of customer service and - for those operating in England Đ how the industry operates with planners.

Mr Nichols added: “We are also looking to provide a code of conduct as there isn’t one presently.”

Surveys were due back before Christmas but a number of firms have been given until Monday to return them after claiming they did not have enough time to respond.

The probe, which is the first of its kind into the house building sector, was announced in May amid concerns of falling standards and a lack of competition.

The OFT has been keeping a close eye on the sector following a review of housing led by economist Kate Barker.

The 2004 Barker Review recommended the introduction of a code of conduct among a number of measures aimed at improving build quality and supply.

The questionnaire is running alongside a consumer study of 1,000 people and a planners’ survey going to all 388 local planning authorities in England. The OFT will publish its findings into the house building industry in the autumn.

The construction industry has come under intense scrutiny from the organisation since 2004. In the spring, contractors will find out if they have been given a Statement of Objections - effectively a list of accusations - by the OFT in its £3 billion cartel investigation.

In all, 57 construction companies have received dawn raids, with a further 45 also questioned. The individual deals range in value from £30,000 to £25 million.

Does the house building industry need a defined code of conduct? Post your reponses by clicking on the blue reader reponse box.