The competition watchdog has launched an investigation into a £2.5bn merger between two of Britain’s biggest house builders.

Barratt Developments, the country’s largest housebuilder, announced plans last month to buy competitor Redrow in a deal that will allow the combined company to build around 22,000 homes each year.

However, the Competition and Markets Authority (CMA) has revealed it is investigating whether the deal may “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.

Both housebuilders are now facing two separate inquiries by the regulator after the CMA last month opened an investigation looking at suspected illegal information sharing between Britain’s biggest housebuilders amid fears that collusion in the industry has pushed up prices.

The watchdog will investigate the practices of Barratt Developments, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry.

Read the latest updates below.