Vacant property security firms' merger criticised by Competition Commission

Published by Max Salsbury for 24dash.com in Housing and also in Legal

The planned merger of two of the country's largest suppliers of security for vacant properties has been criticised by the Competition Commission (CC).

The CC has provisionally warned that VPS Holdings Ltd's intended aquisition of SitexOrbis Holdings Ltd could harm competition and lead to higher prices for customers.

The firms specialise in the security of vacant property, and count local authorities, residential and commercial landlords, retailers and insurance firms among their clients.

A summary of the CC's provisional findings reports that the merger has given the firms a very high share of the social housing market, with limited competition from rivals.

CC Deputy Chairman and Chairman of the VPS/SitexOrbis Inquiry Group, Professor Alasdair Smith, said: "Had it not been purchased by VPS, it seems likely that SitexOrbis would have remained as an independent company or been taken over by another buyer and so continued to act as VPS’s closest competitor.

"Particularly in social housing, customers are now faced with little in the way of alternatives — either from existing competitors or potential new entrants — to prevent the merged company from raising prices or worsening its service in other ways.

"The picture is slightly different for commercial customers, but the nationwide reach of the merged company means that it will also face insufficient competition in some regions and among those customers who require coverage across the whole of the country.

‘We are now seeking views on the best way to restore competition in these markets, which could include a requirement for the sale of all or part of the SitexOrbis business."