Renters’ protection on the cards as competition watchdog launches probe into housing malpractice and land ‘banking’
Housing tenants could be given extra protections and housebuilders forced to change their practices, the competition watchdog has warned.
The Competition and Markets Authority (CMA) has announced a probe into the building and rental sectors, saying it would “need to find” any competition issues that might be holding back house building in the UK.
“The quality and cost of housing is one of the biggest issues facing the country,” said CMA chief executive Sarah Cardell.
The watchdog pledged to look at four areas in the house building sector – build quality, land management, innovation, and oversight by local authorities. It said that it would investigate whether the practice of “banking” land is anti-competitive.
This is when a property developer buys a plot to build on at some point in the future, but then does not develop it for a long time.
It is estimated companies are sitting on enough land to build hundreds of thousands of homes across the country.
Last week Brandon Lewis, ex-housing and planning minister, said Britain was passing up on a near £18bn economic boost due to the government and businesses’ “failure to build enough new” homes,.
In a foreword to a report by think tank Policy Exchange Lewis said decades of weak housing supply has taken its toll on families “in the form of higher house prices, higher rents and higher monthly mortgage repayments”.
The investigation will take into account how fair estate management fees are for things like “unadopted” roads and amenities, the CMA said.
The authority also plans to look at the “end-to-end experience” that tenants go through when renting a property. This will include finding somewhere to live, renting and moving between homes.
“The project will examine the relationship between tenants and landlords and the role of intermediaries, such as letting agents,” it said.
Ms Cardell said: “If there are competition issues holding back housebuilding in Britain then we need to find them. But we also need to be realistic that more competition alone won’t unlock a house building boom.
“In the same vein, we want to explore the experiences people have of the rental sector and whether there are issues here that the CMA can help with.
“We will of course be guided by the evidence, but if we find competition or consumer protection concerns we are prepared to take the steps necessary to address them.”
By August Graham, Press Association