(Bloomberg) -- Britain’s top antitrust enforcer has opened an investigation into eight housebuilders to probe potential information sharing, sharpening scrutiny of a sector that’s failing to deliver enough affordable housing to meet demand.

The Competition and Markets Authority has opened a cartel investigation into eight developers including Barratt Developments Plc, the Berkeley Group, Persimmon Plc and Vistry Group Plc. The investigation centers on concerns the companies may have exchanged competitively sensitive information, which could be influencing the build-out of sites and the prices of new homes. An initial review will take place until December.

CMA Chief Executive Officer Sarah Cardell told Bloomberg Television the watchdog had seen potential evidence of companies exchanging information relating to pricing, sales rates, and incentives offered to new homebuyers. The watchdog has the power to fine firms a maximum penalty of as much as 10% of annual revenue and disqualify directors following cartel investigations.

“Ultimately a lot of the decisions that need to be taken to improve the way the housebuilding market is working, really are decisions for elected governments,” Cardell said in a Bloomberg TV interview Monday. “This is a complex policy space.”

Read more: Britain’s Chronic Housing Shortage Is About to Get Even Worse

The watchdog spent the past year looking into the country’s chronic housing shortage, an issue that’s become a key political battleground ahead of a general election expected this year. In a report published Monday, the CMA said it found that Britain’s planning system — which it deemed complex and unpredictable — coupled with limitations of speculative private development were responsible for the persistent under delivery of new houses. 

The regulator recommended the government streamline the planning system and introduce more consumer protections. 

The CMA said its investigation into the suspected sharing of commercially sensitive information isn’t one of the main drivers of the problems in the report. But the watchdog said it is committed to tackling anti-competitive information when they find it. 

Bellway Plc, Bloor Homes Ltd., Redrow Plc, Taylor Wimpey Plc are the other homebuilders being probed. Barratt, Bellway, Berkeley, Persimmon, Redrow, Taylor Wimpey and Vistry all fell in early London trading. The shares of Persimmon fell as much as 3.7%. 

The shortage of affordable housing has become a key issue across the country. More than four years ago, the ruling Conservative Party pledged to build 300,000 new homes a year, a target they fell short of every year after, before making it advisory in 2022. The Labour Party, which is leading in the polls, effectively matched the objective by promising in October to build 1.5 million homes over five years, should it get into power. 

Bloomberg News analysis of government population data and house building targets earlier this month identified a shortfall of almost 100,000 homes a year for the next five years when including pent up demand from years of missed targets.

The country will need to build almost 400,000 dwellings annually over the next five years to factor in stronger population growth — almost all of which will come from immigration — as well as the homes that would have been built had targets since 2019 been met, according to calculations by Bloomberg News. 

“This report says what we all knew — that the housebuilding sector isn’t working and isn’t delivering the new homes we need,” said Marc Vlessing, chief executive officer of London-based developer Pocket Living. 

The CMA’s study also found concerns about estate management charges and the quality of new homes. The watchdog presented its findings in a letter addressed to Levelling Up Secretary Michael Gove, outlining a number of recommendations such as establishing a New Homes Ombudsman to help customers better pursue developers over quality issues.

The regulator announced its housebuilding market study last February and said it would look into five areas areas of concern, focusing on estate management charges, land banks, planning rules, competition among builders, and barriers for new developers. Initial findings identified complex planning rules and slow decision-making as hindering the delivery of new homes, particularly for small homebuilders with fewer resources. 

Read more: Barratt to Buy Redrow in Deal Creating UK’s Biggest Homebuilder

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