Watchdog promises clampdown on malpractice in house building and rental sector

Tenants could be given extra protections and housebuilders might be forced to change their practices as the competition watchdog opens a new probe into the building and rental sectors.

Officials at the Competition and Markets Authority (CMA) said they “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.

By some estimates companies are sitting on enough land to build hundreds of thousands of homes across the country.

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.”