Competition watchdog says it will continue to monitor landlord mergers
OFT says housing mergers still subject to scrutiny
Landlords should expect continued double regulation of housing mergers despite the government’s competition watchdog dropping its first investigation of the housing sector.
The warning came from the Office of Fair Trading this week as it abandoned a probe into 32,000-home Your Housing Group, which was formed in April as a result of a merger between Harvest Housing Group and Arena Housing Association.
The OFT found that the deal did not qualify for further investigation into whether it breached competition guidelines by creating a ‘substantial lessening of competition’.
Your Housing Group, which operates in the north west, the midlands and Staffordshire, had already been given the go-ahead by the housing regulator when the OFT intervened without informing the Homes and Communities Agency.
A spokesperson for the OFT cautioned that the decision did not mean future housing association mergers would not be subject to investigation.
He said: ‘Each case is looked at on its own merits. In this instance we have reached the decision it [Your Housing Group] doesn’t qualify, but that’s not to say others will not.’
The HCA, which took over regulation of social landlords in April, said it welcomed the decision, but also warned that it does not set a precedent.
A spokesperson for the HCA said: ‘We have made clear in the regulatory framework that providers need to ensure they are meeting all legal and regulatory requirements, including those of other regulators and agencies such as the OFT, that have a broader remit sitting alongside the HCA’s specific focus on social housing.’
It is understood that the HCA has not reached an understanding with the OFT to avoid future regulatory overlaps.
An OFT investigation is triggered if an organisation being taken over has a turnover of more than £70 million and the merger creates a 25 per cent control of market supply. Your Housing Group’s largest market share in Warrington was around 20 per cent.