The Office of Fair Trading (OFT) has published two new reports that it commissioned as part of its market study into the UK homebuilding industry.

The first, a report of a survey of purchasers of new homes, found that while many homebuyers experienced defects to some degree, these were often minor and were later fixed by homebuilders. However, for a small percentage of homebuyers the defects were more serious and costly.

A study into financing for homebuilders, meanwhile, suggests that the holding of 'landbanks' by firms reflects the need to have a pipeline of land at different stages in the development process, rather than a reluctance to develop or a desire to prevent competition. According to the report, homebuilders look to start work on site as soon as possible due to the holding costs of land.

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The report by consultants KPMG also found that short-term demand for homes is significantly influenced by issues like consumer confidence, house price expectations and mortgage availability.

Heather Clayton, Senior Director of Infrastructure, said: "These two reports form an important part of the picture on the market for new homes in the UK. The next step is to discuss these and other findings with our stakeholders, asking if they indicate that the market is broadly competitive and whether there is room for improvement in homebuyer satisfaction levels."

(CD/JM)