A government-backed launch of property websites where landlords can list properties free of charge has come under fire from agents in Scotland.
The Scottish Government has created five “hubs” allowing the 32 local councils in Scotland to run the free online listings.
Agents have expressed concern that they are being cut out of the equation and that local authorities, backed by the Government, are being actively encouraged to exercise more control over the private rented sector.
There is also concern that the move is being copied elsewhere in the UK. The private firm, Local Pad, that powers the new Scottish portal says on its website that it works with 52 councils across the UK, giving them the means to “manage and advertise private rented sector properties”.
Edinburgh City Council announced the launch by email, saying: “Across the UK a number of similar portals are established and have been successful in promoting the private rented sector, reducing advertising costs for landlords whilst allowing their properties to be seen by a large audience.”
By coincidence, the launch of the first Home Choice site was on January 26 – the same day as OnTheMarket went live.
The first site, which yesterday had just 14 properties advertised on it, covers east and central Scotland and describes itself as a “housing advice partnership” between the local authorities of East, Mid and West Lothian, Falkirk, Edinburgh and the Scottish Borders.
While landlords and tenants on the new site are specifically invited to sign up and advertise, agents are not.
There are also concerns that local authorities in Scotland, where landlord registration is a legal requirement, may be using their access to registration lists to advertise the free portal to landlords.
One agent, Ewan Foreman, managing director of ILET, has written two blogs on his firm’s website to express his anger.
In one, he said: “The public sector has taken full advantage of legislative powers, taxpayer funding and unique access to public sector records in a bid to compete in the highly competitive property portal sector and bring the private rented sector under the increased influence and control of local authorities.”
He also queried the deal with Local Pad, a private company.
Foreman yesterday told Eye: “Something snapped when I read the email about the new portal.
“I have been a strong supporter of many of the recent initiatives by the Scottish Government, but a new portal which singularly fails to work with local businesses or value those currently working at the coalface of the private rented sector was one step too far.”
The blogs are here
and here
The site is here
Comments (7)
Our primary concerns are legal ones. One re Data Protection and possible misuse of landlord registration database by Local Authority to tout for business. Two re Competition – and unfair entry of LAs in to an already very competitive portal market and the undercutting of existing long standing, independent and reputable Scottish portal businesses. The prospect of calling on the Competition and Markets Authority (which is non devolved) to investigate is not an attractive one.
Another legal concern is fact that Local Authorities are enforcement authorities and as such are supposed to enforce new legislation such as requirement for appearance of EPC info on property adverts. Landlords that do not comply can be fined considerable amounts by Local Authority. So what happens when Local Authorities are breaking this law as they are currently? (eg EPC info not appearing in adverts for both Local Authority properties and private properties on Perth & Kinross version of hub). Can a Local Authority fine itself for non-compliance? Seems absurd but that is the situation we are now in. Either the law is an ass or there needs to be swift clarification on how enforcement authorities are allowed to operate in this area.
More on this here: https://twitter.com/Lettingstats/status/562593559694802945
And in a final Kafkaesque twist a quick search of the properties on the Perth & Kinross portal reveal that they are not even LHA friendly! You really couldn't make it up.
http://www.pkclocalpad.co.uk/
Lettings control has been on the political agenda of the SNP and Labour party for sometime now, has it not with some zanney ideas thrown in? Why would they need to do it, if it was not to take control of lettings industry. This is the first step of the ladder and one could argue an abuse of privileged position to interfere with a free market which is the backbone for any economy to grow.
Localpad's Twitter account reads as follows:
"Leading the way in developing councils' engagement and management of the PRS and Social Lettings through digital innovation. Over 35 councils and counting – Yorkshire".
Most Councils are not capable of organising a bit of salt & grit – As long as they are ensuring all legal requirement are correct in terms of marketing/legal certificates let them do what they want. They are only a danger to themselves.
This reminds me of a website which one of the South Wales councils set up a few years ago. It was effectively setting itself up as an estate agent (obviously with public money) and pushed the fact that owners could save money by cutting out estate agents. I kept an eye on it for a few months and I don't know if it's still going, but in the time I was watching it, in my opinion it was a damp squib. If I remember correctly they had only a handful of properties advertised (I think all just online as I don't remember an office) and as far as I remember none of them sold. I often wonder what became of it. I've got no problem with competition PROVIDED it's a level playing field; my point is how is an legal business expected to compete with taxpayer subsidised staff, with taxpayer subsidised pensions, taxpayer subsidised offices, taxpayer subsidised IT etc. And if it's such a good idea, where do you draw the line? Eg why not council run garages, council run carpenters, council run plumbers, council run builders etc etc.
Isn't this a step towards Communism?
Establishing a viable property portal in a mature market, even with the unique advantages a council may hold, would be a challenging undertaking. A number of different parties will have various concerns and Citylets queries the legality of this move as it appears to be setting up in a commercial market where there is no apparent market failure & have asked the council for a discussion on the matter. It appears to be utilising public money earmarked for initiaves that will improve housing options though we maintain that this will only serve to market those options that already exist.