Rosalind Evans
The UK’s Competition and Markets Authority (CMA) has expressed worry over potential breaches in consumer protection laws by a notable fraction of landlords and letting agents. Reports highlight concerns such as hefty guarantees, fees imposed on senior citizens transitioning to retirement homes, and discrimination against specific tenant groups.
Earlier this year, the CMA disclosed its plans to delve into the private rental and housebuilding industries. One of the significant areas of concern is the sizable plots of undeveloped land owned by developers, referred to as land banks, and the fees for homeowners on new estates.
Sarah Cardell, CMA’s CEO, emphasized, “While the CMA can’t rectify all housing market issues, we’re committed to making the private rental and housebuilding sectors more consumer-friendly.”
Following their February announcement to review the housing market, the CMA received feedback pointing to five critical issues in private housing rentals. This investigation is crucial, especially now that private rents in the UK have skyrocketed, often outpacing inflation.
Issues brought to the CMA’s attention include zero deposit schemes that might have hidden liabilities and sham licenses, which give tenants limited rights. The authority is also examining clauses that put hefty burdens on tenants and “no DSS” advertisements, which may unlawfully discriminate against housing benefit recipients. Moreover, “event fees” charged to those moving into retirement accommodations are under scrutiny, with concerns that businesses may exploit older consumers.
Cardell assured that the CMA aims to provide clearer guidance for letting agents, ensuring that both landlords and tenants understand their rights and obligations. The CMA will consider enforcement action against any agency or landlord found violating consumer protection laws.
Furthermore, the CMA is evaluating economic factors impacting housebuilders. They are probing into the vast tracts of land owned by leading UK housebuilders, as there’s evidence of these tracts increasing in size, potentially limiting competition and housing construction in certain regions. The role of complicated planning regulations and their potential hindrance to new constructions, especially by smaller developers, will also be assessed. Another aspect to be examined is estate management charges for properties built on new estates but not integrated into their local authority’s maintenance system.
Cardell confirmed that upon completing their review, the CMA would consider actionable measures or recommend legislative changes to the government. The CMA intends to share updates on its findings and actions in the upcoming months.
The UK housing market, pivotal to the nation’s economy, is under the magnifying glass, with the CMA playing a proactive role in ensuring fairness and transparency. As private rents rise and the complexities of the housing market unfold, the importance of safeguarding both tenant and landlord rights becomes paramount. The autumn update from the CMA is eagerly anticipated, with many hoping for resolutions that can bring stability and trust back into this essential sector.
