When Councils Compete with Businesses they Tax: A Question of Ethics and Fairness by Shane Bray
I’m absolutely flabbergasted at a local authority initiative I read about in Property Industry Eye [[1]]. This sets a worrying precedent. I felt I had to respond.
Liberal Democrat controlled Dorset Council’s new “Key4Me” initiative may be dressed up as a well-meaning housing solution, but beneath the surface lies a deeper ethical concern that should alarm any business operating in the private rental sector.
Let’s be clear: the council collects business rates from local estate and letting agents—compulsory taxes paid to fund local services. These same agents are now being undercut by the very authority that taxes them, through a scheme that directly competes with their business model. How is it ethical for a council to take money from a business with one hand and use it to fund a program that deliberately poaches that business’s clients with the other?
The Key4Me scheme offers landlords cash incentives, free compliance services, and tenancy management perks—all things for which letting agents must charge a fee in order to survive. In a rental market already under strain due to dwindling landlord numbers and ever-growing regulation, estate agents are being squeezed yet again—this time not by market forces, but by a taxpayer-funded competitor.
And this isn’t just about competition—it’s about principle. No private business can fairly compete against a public body that can afford to offer services below cost, using funds that include the very taxes collected from its competitors. If a private company attempted this kind of self-dealing, it would rightly face scrutiny. Why should a council be exempt?
Landlords, too, should look carefully at the longer-term consequences. Local authorities are hardly the best ally when tenancies go wrong. Many landlords have experienced the frustrating reality of councils advising tenants to remain in properties even after notice has been served, essentially forcing landlords into expensive court proceedings if they want their property back. This is not partnership—it’s obstruction.
And now, councils want to be your letting agent?
Estate agents and landlords should remember this come the next election. Councils are supposed to support local businesses, not compete with them. If this is the kind of “support” being offered, it may be time to lend support elsewhere—perhaps to candidates and parties that believe local government should focus on governance, not grabbing market share in the private rental sector.
Business is hard enough already. Agents shouldn’t have to fight their own council to stay in business.
Shane Bray manages an estate agent office in Surrey, and is interim Vice-Chair of Reform UK Godalming and Ash branch.
[[1]] https://propertyindustryeye.com/council-says-its-scheme-provides-an-alternative-to-expensive-agency-fees/