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Government timetable for fee ban leaves no time for CMA review

21st March 2017

CMA review into fees and charges in the PRS will not take place before fee ban

The speed with which Government is working to in order to ban letting agent fees does not leave time for the Competition and Markets Authority (“CMA”) to undertake a review into the market, according to the Fair Fees Forum.

Earlier this year, the Forum requested the CMA review fees in the lettings market, its overall regulatory framework, and how it should best operate to ensure a fair, safe experience for tenants.

In its response, the CMA has said it does not believe there is sufficient time for such a review, given the speed with which the Government wishes to move on the fee ban.

This is disappointing news for the Forum, which strongly believes a CMA review would provide much-needed analysis on fees and charges and the wider operation of the market. Such impartial, independent analysis would help inform the legislation the government intends to bring forward.

However, the CMA has left the door open. In its response to the Fair Fees Forum’s Chair, Sheila Drew Smith, it explained that while the Government’s aims were to improve competition in the sector and give renters greater clarity and control over what they pay, it may review the detail of the consultation when published to consider the potential for unintended consequences on competition. The CMA also agreed to take into account an evidence paper submitted by Forum members.

The Forum has urged that great care must be taken not to cause irreparable damage to this part of the PRS, by rushing through any such ban without fully considering the impact on the sector.

With the Budget out of the way, the Forum is now urging Government to publish the consultation on the fees ban without delay.

Throughout the consultation period and beyond, the Forum will continue to work closely with civil servants to ensure the joined-up voice of the sector is heard loud and clear.

Isobel Thomson, Chief Executive of NALS, which act as Secretariat for the Fair Fees Forum said:

“Given the pivotal role played by the PRS, we feel this decision is a missed opportunity to review the way the sector works to deliver the best outcome for all concerned.

However, it is clear from the CMA response that it feels there is not enough time for a review before the Government legislates. That being the case, the consultation must now be published in order to begin the process of discussions. We will come back to the CMA again once the consultation document is published.”

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