The Office of Fair Trading (OFT) has announced a surprise review of the UK's housebuilding industry.

A statement from the watchdog today said it had launched the study amid potential concerns from competitors and consumers.

The OFT explained that the "groundbreaking" evaluation into the £20 billion per annum industry would focus on delivery of housing and consumer satisfaction.

Details under the microscope will include whether land suitable for development is being efficiently brought through the planning approval stage and if planning permission is being effectively converted into new homes.

OFT chief executive John Fingleton said the overall aim of the year-long review is to "improve [homebuyers'] experience of buying a new-build home as well as the quality of those homes".

"This is the first in-depth examination of competition and consumer issues in new housebuilding," he said, revealing that the watchdog had been assessing the housebuilding industry for the last three years.

"This is a hugely important market for the economy because of its substantial economic impact and because unresponsive housing supply hinders labour mobility, constrains economic growth and harms consumers.

"Furthermore, for individual house buyers, even low levels of dissatisfaction can translate into very high detriment. The study will examine how regulation and competition in the market might work better for both the economy and individual house buyers," Mr Fingleton concluded.

The OFT review could lead to a market investigation by the Competition Commission or recommend that an industry code of practice be set up.

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