The investigation centres on concerns the companies may have exchanged competitively sensitive information, which could be influencing the build-out of sites and the prices of new homes. 

An initial review will take place until December.

CMA chief executive Sarah Cardell said the watchdog had seen potential evidence of companies exchanging information relating to pricing, sales rates, and incentives offered to new homebuyers. 

The watchdog has the power to fine firms a maximum penalty of as much as 10% of annual revenue and disqualify directors following cartel investigations.

“Ultimately a lot of the decisions that need to be taken to improve the way the housebuilding market is working really are decisions for elected governments,” Ms Cardell said. “This is a complex policy space.” 

The watchdog spent the past year looking into Britain's chronic housing shortage, an issue that has become a key political battleground ahead of a general election expected this year. 

In a report published on Monday, the CMA said it found Britain’s planning system — which it deemed complex and unpredictable — coupled with limitations of speculative private development were responsible for the persistent under delivery of new houses.

The regulator recommended the British government streamline the planning system and introduce more consumer protections.

The CMA said its investigation into the suspected sharing of commercially sensitive information was not one of the main drivers of the problems in the report. 

But the watchdog said it was committed to tackling anti-competitive information when it found it.

Bellway, Bloor Homes, Redrow, and Taylor Wimpey are the other homebuilders being probed. 

The shares in Barratt, Bellway, Berkeley, Persimmon, Redrow, Taylor Wimpey and Vistry all fell in London trading at one stage. 

Most of the housebuilder shares erased much of their gains by the close of the trading session.  

• Bloomberg