The Office of Fair Trading (OFT) has been called in following allegations of unfair competition made against the Environment Agency regarding the cost of environmental searches.
The Environment Agency is set to launch its own property search service in April amid claims it will simultaneously increase the charges it makes to existing environmental search services by as much as 20 times.
Environmental searches are required by lenders and if the increased costs are passed onto borrowers, it will be yet another expense to add to the house-buying process.
The claims have been made by Sitescope, which operates in the residential environmental search market as Homecheck Professional.
The claims centre around the Competition Act 1998, which states that the Environment Agency must ensure it does not favour its own retail service provider business over other resellers.
Dan Re’em, director of Sitescope, said the Environment Agency has not explained how the proposal will allow it to remain within the boundaries of the Act, and as it stands it would restrict competition, stifle innovation and result in a poorer quality and more expensive service to customers.
Re’em said: ‘The source of much of the original data for environmental searches is the Government, or its agencies ‘ crucially the Environment Agency. Without access to such data on fair and reasonable terms, private sector services are dead in the water. If implemented, the Agency’s threatened twenty-fold plus price rise could put us out of business. It is a clear abuse of monopoly power.’
The Environment Agency refused to comment on either the allegations or its property search service.