That wouldn't be a sustainable pact. Any builder could profit by breaking it and there would be nothing the colluding builders could do about it.

Builders have an incentive to liberalize development laws and do push for upzoning. It's those who own condos who have an opposing financial interest in limiting development.

Beyond financial interests there are NIMBY and other cultural interests that seem to be decisive, like heritage preservation.

There is also bureaucratic inefficiency limiting housing development by imposing lengthy and expensive processes for getting permits and approvals.

What's a condo? What's upzoning? I haven't come across these terms in the UK, are you sure they're relevant?

A condo is an apartment unit in a building where units can be owned individually. Upzoning means changing the zoning laws of the neighbourhood where the property is situated to allow taller buildings with more square footage of living space.

Many neighbourhoods have zoning laws that impose height limits that prevent high-density developments, and this constrains growth in the supply of housing.

The builders also say they're short of workers. Or they aren't paying them enough. Or we lack less-skilled immigrant laborers:

https://www.mercurynews.com/2019/04/14/opinion-california-ca... = http://archive.is/m8ZyV