A MULTI-BILLION pound business deal between two of Britain's biggest housebuilders could drive up house prices in Whitchurch, a watchdog says.

The Competition and Markets Authority (CMA) has found that housebuilder Barratt Homes’ £2.5 billion buyout of Redrow raises competition concerns in Whitchurch, where it said the two companies hold a high share of the land.

The CMA said it has concerns over a roughly 11-mile area, which also includes Nantwich, in Cheshire, plus Market Drayton and Ellesmere, but it is not concerned on a national level.

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Barratt and Redrow now have the opportunity to submit proposals which address the CMA’s concerns in the local area to avoid the probe moving to a more in-depth review.

Joel Bamford, executive director for mergers at the CMA, said: “Prospective homebuyers must not be disadvantaged as a result of deals like this one – with the potential loss of competition leading to even higher house prices or lower quality homes.

“Our initial investigation found concerns specifically in one area in and around Whitchurch.

“The companies now have the opportunity to agree workable solutions which address our concerns rather than move to a more in-depth investigation.”

The watchdog said the deal could lead to higher prices and lower quality homes for homebuyers in the areas in Shropshire, where both firms have big developments.

However, the merged business will continue to face competition from rivals nationally and in all other overlapping local areas, it added.

While the deal does not raise UK-wide competition concerns, the CMA said it is aware there may be further consolidation among housebuilders in the UK and is “committed to carefully assessing mergers in the housebuilding market further, both on a national and local level”.

In a joint statement, Barratt and Redrow said they will engage with the watchdog and that they have “identified undertakings which we believe will address those concerns”, but that “no land disposals are being anticipated or proposed”.

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Barratt chief executive David Thomas said: “We remain confident that the combination of Barratt and Redrow will be approved and that it is in the best interests of our customers and wider stakeholders.

“Together we plan to build on our shared strengths and create an exceptional homebuilder, in terms of quality, service, and sustainability, helping to deliver the homes the country needs.”

Matthew Pratt, chief executive of Redrow, said: “Once the CMA process has completed, we are looking forward to our future as one team, accelerating the delivery of high-quality homes that the country so urgently needs.”