Fresh blow for landlords as CMA launches probe
The competition watchdog has launched an investigation into the rental market in a fresh crackdown on landlords as rents soar amid a shortage of rental properties.
The Competition and Markets Authority (CMA) will explore consumer protection for renters amid fears landlords have too much power in negotiations with tenants.
Its report – which is expected later this month – will investigate how an extreme shortage of properties has led to increasingly arduous contract terms, such as demands for rent guarantors.
“The quality and cost of housing is one of the biggest issues facing the country,” said Sarah Cardell, Chief Executive of the CMA. “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.”
There are 11 millions tenants in the UK, four million rental properties and two million landlords.
The CMA will consider the end-to-end renting process from finding a property to moving in and will seek to identify any consumer protection issues. It will examine the relationship between tenants and landlords and the role of intermediaries, such as letting agents.
A call for evidence from tenants and landlords could follow the inquiry which could ultimately lead to enforcement action or new consumer guidance being issued for tenants and landlords.
The CMA’s review of the rental market is a fresh blow for landlords already struggling with soaring mortgage rates, the removal of tax breaks, looming eco-rules and the end of no-fault evictions.
“The probe will need to consider how to protect tenants from unscrupulous landlords,” said Letio founder Mark Sivarajah, “without adding to the mounting list of burdens driving responsible landlords out of the sector. We need to find a way to let better – for tenants and landlords.”
The probe will be conducted in parallel with a CMA investigation into the UK’s house-building sector.
