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UK competition watchdog raises concerns over housing market

A “significant minority” of landlords and letting agents may not be following consumer protection rules, according to the UK’s competition watchdog, which raised concerns including complaints about onerous guarantees, discrimination against certain types of tenants, and fees charged to older people entering retirement housing.

The Competition and Markets Authority (CMA) laid out on Friday the focus of its work on the housing market, after announcing in February it would look into the private rental and housebuilding sectors.

Among the competition concerns in the market are the large amounts of land owned by housing developers but not built on, known as land banks, as well as charges for owners of properties built on new housing estates.

Sarah Cardell, the chief executive of the CMA, said: “The CMA alone can’t resolve the problems in the UK housing market. But we have a role to play and will do our part to help ensure the private rental and housebuilding markets work better for people and businesses.”

Since launching its study into the housing market in February, the CMA said consumers and others in the industry had contacted it to raise concerns about five areas of private housing rental.

The study comes at a time when private rents in Britain have reached record highs, running well ahead of inflation, and there have been reports of queues of prospective tenants for available properties.

Concerns about the private rental market raised with the CMA included zero deposit schemes, where tenants are not required to pay a large deposit when beginning a tenancy but may be unaware of their liabilities. Sham licences, where tenants were told by landlords that they only had a licence to occupy a property rather than having the full consumer rights of an assured tenancy, were also raised as a concern.

The watchdog is looking into onerous guarantee clauses faced by some tenants, where they faced hefty obligations when renting a property, such as having to provide extensive evidence of assets.

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