Landlords and agents targeted by the Competition and Markets Authority

“Activity that could constitute unlawful discrimination: This includes, for example, looking at those who advertise properties as not available to housing benefit claimants (i.e. ‘no-DSS’).” …….So what law is being broken ?

Reply to the comment left by Dylan Morris at 25/08/2023 - 10:39
I don't let my property to housing benefits claimants unless they pay me directly. This is because the law says that if you find out that the tenant is not eligible for benefits then the council can come and get the money off you, the landlord. But as the landlord you have no powers to check that the tenant is eligible.

If a housing benefit tenant wanted to pay me directly I'd have an open mind about that but it's unlikely the tenant would pass the affordability checks and somebody else would be in a better position to rent the property.

"Guarantees: The CMA has seen examples of onerous guarantee clauses which impose wide obligations on tenants – such as requiring them to provide extensive evidence of assets."
This is incomprehensible. A guarantee imposes obligations on the guarantor, not on the tenant.
What the CMA may be referring to is the requirement that the guarantor be a home-owner. In other words have at least one asset, is not a man of straw and be unlikely to "do a runner".
Prudent landlords will more and more be asking for guarantors for the obvious reason that if a tenant stops paying rent but wants to stay in the property it can take months to evict and the landlord is left with a massive debt. As soon as a guarantor is called upon to pay, you can be sure they will be in touch with the tenant to say: "What is going on? I am not going to pay for you to live rent-free. Sort your finances out or seek a surrender of the tenancy."
A well drawn guarantee should cover the tenancy becoming periodic. This will become the norm once fixed terms are abolished.
Why is the CMA attacking landlords for behaving prudently? Haven't they noticed that the Government has forced landlords out thereby reducing the supply of houses? The result, surprise, surprise, is that there are fewer properties available for poorer tenants, many of whom will find they are unable to find a landlord willing to take them.
The CMA may make things even worse for tenants by making life harder for the landlords who remain.

Reply to the comment left by Ian Narbeth at 25/08/2023 - 11:07
You're correct here. The competition and markets authority is primarily there to ensure fair competition in markets. The issues that we are seeing at the moment are to do with lack of supply driven by government policies. As the supply to the market has gone down the prices have gone up.

The CMA would do well to look at the fact that any business can deduct it's finance costs against expenditure. A limited company holding residential property can deduct the costs of finance from its revenues. But a non-incorporated landlord cannot. When interest rates go up to the levels we see today that are about what interest rates were when I bought my first BTL, but about a third of what they were when I bought my first home then those anti-competitive policies start to bite and drive landlords out of the PRS.

Reply to the comment left by Beaver at 25/08/2023 - 11:23Exactly this. Would CMA like to comment on how unfair the relative implementation of contract terms are between LL and tenant - eg. in an AST, the tenant can decline to pay rent and trash a place and LLs have to suck it up, or maybe that LLs are issued with potentially enormous fines because of minor errors in paperwork.

I don’t think any LL would argue if the playing field was truly level, but it isn’t, and as pointed out in other comments, tinkering with the provision of guarantors is only going to make things worse. If seeking a guarantor is an onerous contract term, what do we call the requirement to let an expensive asset to someone who can elect not to pay or perform any of their contract terms, and be unable to evict them - thereby ensuring significant and ongoing losses and stress for the LL?

Perhaps the CMA could apply this to commercial lending as well ? Maybe a bank should be prohibited from enquiring as to the assets of a director when asking him to personally guarantee a loan being made to his limited company.

Reply to the comment left by Freda Blogs at 25/08/2023 - 11:50
Precisely. And what a ridiculous thing for the CMA to be looking into... this "significant minority"...when a significant majority of landlords are either being driven out of the market by unfair tax treatment or by assessments that do not benefit tenants or make a significant different to climate change.

Having looked at the issue of allowing you to deduct your finance costs, even if only for an energy efficient property not overly reliant on non-renewables, there are so many other 'competition' issues that the CMA could look into that could be value for money.

One thing they could look into is the EPC system, which is a black box. If that black box was transparent and you could challenge the EPC assessment with reliable data then introducing competition could weed out poor assessments, poor assessors and poor assessment companies. When they looked at that they should also look at the recent implementation of the EICR requirements that created a gravy train for electricians.

We're still not taking Benefit tenants.
I'm biggest Benefit Landlord in Nottingham & I'm not taking em any more.
I'm biggest Private provider to Benefit tenants in Nottingham over last 26 years & I'm not taking em any more.
But still no one comes to ask me Why not Mick?
Instead they skirt round the issue & try to force Landlords to take Benefit tenants.

We could solve this in 4 seconds. You all know the answer, I do. Beggars belief.
Worse thing is, it costs no money. Govt already paying the Housing Element for the rent. What is the WORST that can happen if u pay Landlord direct? Oh I see...... Landlord gets paid & takes Benefit tenants again & homeless reduces saving £ millions through all the associated costs.

It's all disjointed. Job Centre staff don't care & love having one over on Landlord. They despise me in Nottingham, most of the UC staff. But on the rare occasions, they ring me & talk to me, they say Ooh u alright really aren't u. I expected some horrible nasty person.
Many Landlords now are saying it's easier to evict than try to secure direct payment-And we know how hard it is to evict.

Reply to the comment left by Mick Roberts at 26/08/2023 - 07:12A couple of years ago I had a tenant who became unemployed and was unable to pay his rent. After two months arrears I applied to have rent paid direct to me. I only received one months rent direct, then the following month UC started paying it to the tenant again who carried on spending the money on his drugs (cannabis and heroine). He wasn’t happy with the rent being paid direct to me (obviously) and instructed UC to pay it to himself again. They did and I received no more rent until the day he was evicted via Section 8. Apparently they have to pay rent to tenant again if he asks. You couldn’t make this sort of stuff up !! I could never speak to UC about the payments they just kept referring me back to my tenant, who wouldn’t speak to me either. Total shambles !!

Reply to the comment left by Dylan Morris at 26/08/2023 - 11:16
Yes that happens all the time still now. It's not supposed to, but UC constantly make these mistakes. I had two last month revert back to tenant & they shun't have done.