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A year-long inquiry by the government鈥檚 competition watchdog into the housing industry has found that the drive for zero-carbon homes could affect competition in the industry.

However, in a major victory for the sector, the study by the Office of Fair Trading (OFT) found 鈥渓ittle evidence鈥� of anti-competitive practice by housebuilders and 鈥渘o evidence鈥� of monopolies, even on a local level.

Also, as predicted by 好色先生TV two weeks ago, the inquiry endorsed a proposed code of conduct to improve levels of customer satisfaction. But it said the government would step in if certain milestones were not met.

The report, published yesterday, found the move to zero carbon may push up customer complaints and that small firms 鈥渕ay struggle, without assistance, to meet the requirements鈥�. It called on the government to provide help to small housebuilders.

Heather Clayton, the OFT鈥檚 senior director of infrastructure, said: 鈥淲e did get a lot of representations about the Code for Sustainable Homes and the difficulties smaller builders might have with it.

鈥淭he government needs to think of how it can provide support for smaller builders.鈥�

Imtiaz Farookhi, chief executive of the NHBC, the new homes warranty body, described the report as a 鈥渧ictory for common sense鈥� and said he was 鈥渧ery pleased鈥� the report had raised the issue of the impact of the Code for Sustainable Homes on smaller builders. 鈥淭here are big risks and big challenges to bringing in more regulations, particularly at this stage in the market.鈥�

Neil Jefferson, chief executive of the cross-industry Zero Carbon Hub, said: 鈥淚n this difficult market, zero carbon is a potential barrier to competition.鈥�

The Home Builders Federation described the report as a 鈥渉uge boost鈥� to the industry.

The OFT has set four milestones on the path to establishing a new code to protect consumers, which it says must be up and running by March 2010 (see box). The OFT will also recommend a statutory redress system, paid for by a levy on the industry.

The code will cover issues such as dispute resolution and moving-in dates, and is endorsed in principle by lenders and builders.

Clayton said she was worried that customer satisfaction levels may fall further because of the housing slump, with builders laying off thousands of staff who could have provided after-sales service.