Will a ban on rental bidding wars help curb soaring rental costs?

The renters’ rights bill had its first reading in parliament on 12 September. The bill proposes the biggest changes to the private rented sector in over three decades.

When will the renters’ rights bill take effect?

The bill still needs to be approved by MPs and peers, with a second reading set to take place in October. While there is no official date when the new laws could be introduced, housing minister Matthew Pennycook said he hopes it will make “very quick progress” through the House of Commons. He aims for the new rules to be in place during the first half of 2025, or by next summer.

What are ‘bidding wars’ and what will a ban entail?

As well as a ban on ‘no-fault’ evictions, the bill seeks to prohibit costly ‘bidding wars’, where tenants compete by offering higher bids to secure a property. With rental home availability at a record low, the government notes that tenants are under “an incredible amount of pressure”, and are often making “unsolicited bids” to give them an advantage.

The proposed legislation would prevent landlords from renting out properties for more than the advertised price, with any attempt to solicit or accept higher bids being banned. This is the first ban on competitive bidding in the UK housing market, aiming to control spiralling rent prices, which have become unaffordable for many and have contributed to the housing crisis.

But will the ban really help curb soaring rents?

While renters’ rights groups have broadly welcomed the bill, they warn that it may not go far enough in addressing the affordability of rent.

“The bill is broadly positive and has been beefed up since the previous offering, but we do still have some concerns, particularly around the soaring rents we continue to face,” said the renters’ rights group Generation Rent.

Campaigners argue that banning rental bidding does not tackle the root causes of escalating prices. Joel Dignam, executive director of the Australian campaign group Better Renting, a country which has seen similar legislation, says the ban isn't just about affordability, but also transparency.

“I think what’s tricky for renters is just not knowing what the real price of the property is. Is it even worth going to this [viewing] if it’s out of my price range?” says Dignam.

In the UK, the National Residential Landlords Association (NRLA) supports the ban on bidding wars but calls for more detail on how the policy will be enforced. The NRLA says that more action is needed to increase the supply.

There are also concerns that landlords might inflate asking rents and then accept lower offers, if necessary. Conor O’Shea from Generation Rent argues that banning bidding wars is “not going to be the silver bullet that will deal with the affordability crisis for tenants”.