The Competition and Markets Authority (CMA), the UK’s competition watchdog, has expressed concerns about the housing market, stating that a “significant minority” of landlords and letting agents may not be complying with consumer protection rules.
The CMA has highlighted several areas of concern, including onerous guarantees, discrimination against certain tenants, and fees charged to older people entering retirement housing. The CMA has also raised concerns about the large amounts of undeveloped land owned by housing developers, known as “land banks”, as well as charges for owners of properties on new housing estates.
The housing market study comes as private rents in the UK have reached record highs, and there have been reports of long queues of prospective tenants for available properties. Some of the concerns raised with the CMA include zero deposit schemes, where tenants may be unaware of their liabilities, and sham licences, where tenants are not given full consumer rights. The CMA will also investigate onerous guarantee clauses and unlawful discrimination against certain tenants.
In addition, the CMA has received complaints about “event fees” charged to vulnerable tenants entering specialist retirement housing. The watchdog will review whether certain businesses are taking advantage of elderly consumers. The CMA plans to provide updated guidance for lettings agents to clarify tenants’ and landlords’ rights and responsibilities. If any agency or landlord is found to be breaching consumer protection law, the CMA has not ruled out launching enforcement action.
The CMA is also investigating the economic conditions affecting the housebuilding sector and the concerns raised by campaign groups, councils, and housing developers. It will analyze the large land holdings of the UK’s largest housebuilders, investigating whether these holdings are limiting competition or slowing the rate of housebuilding. The CMA will also consider whether complex planning rules and uncertainty about decision-making are hindering the construction of new homes, especially by smaller housing developers.
Other issues raised include estate management charges, which have to be paid by owners of properties on new housing estates that have not been “adopted” by the local authority. The CMA plans to provide updates on its work in the private rental and housebuilding sector in the autumn and will consider appropriate actions, such as recommendations to the government for legislative change, based on its findings.