Housebuilding might be thought of as an industry that is as open to small firms as it is to large, as the technology that is employed is relatively straightforward, it is a relatively labour-intensive industry and there is little customer brand recognition or loyalty.  However, is this actually the case?

This question was explored by Michael Ball of the University of Reading Business School, UK, with funding from the RICS Education Trust.

What he found was that, unlike the USA and Australia, the housebuilding industry in the UK is dominated by large firms. Other key differences that emerged where that:

• housebuilding output is much higher in Australia and the USA than in Britain when measured on a per capita basis
• the decline in firm size from the largest downwards is more rapid in Britain than elsewhere.

What might be behind this? Ultimately, Michael Ball believes that the nature of the planning system in Britain is behind the differences. The scarcity of readily developable land has encouraged housebuilding firms to expand by taking each other over, leading to a gradual but inexorable concentration in the hands of a few large firms.