(Sharecast News) - Britain's competition regulator said its phase 1 review into Barratt's £2.5bn deal to buy smaller house builder Redrow had raised concerns around one Barratt development.

The Competition and Markets Authority (CMA) said it was concerned about the development in Whitchurch, which includes nearby towns such as Nantwich, Ellesmere and Market Drayton.

It offered Barratt and Redrow the opportunity to submit proposals to address its concerns.

"Both housebuilders currently hold a high combined share of land in the catchment area centred around the Barratt development at Tilstock Road, with the addition of Redrow's development at Kingsbourne in Nantwich," the CMA said on Thursday.

"If the deal goes ahead, the CMA found that it could lead to higher prices and lower quality homes for homebuyers in this catchment area."

Reporting by Frank Prenesti for Sharecast.com