Labour promises to introduce new laws to protect tenants from “bidding wars” 

Economy News Policy & Politics

Sir Keir Starmer has announced that, if Labour wins the upcoming election, they will introduce new laws to eliminate rental “bidding wars.” Speaking during a special edition of BBC’s Question Time, the Labour leader said the party plans to prevent landlords from “exploiting tenants” by encouraging them to offer higher rents to secure a property.

Starmer stated, “We can enact legislation to prohibit this practice because it’s driving rents sky-high and is unfair to people.” 

However, when asked about the specifics of how this legislation would work, he did not provide detailed answers. He also avoided directly addressing whether private landlords would have to accept the first offer they receive, instead focusing on the need for a system to prevent continuous rent increases.

A survey by the New Economics Foundation think tank last year found that 40% of households renting privately in England, who had moved within the past year, paid more than the advertised rent for their property. On average, these renters paid an extra £1,200 annually above the listed rate. Campaigners argue that this practice pressures prospective tenants to offer higher rents, further inflating prices.

Labour also proposed amendments to the Renters (Reform) Bill earlier in the year to curb bidding wars. The proposed changes would require landlords and letting agents to specify the rent amount when advertising a property and prevent them from soliciting higher offers from prospective tenants. 

However, tenants would still be allowed to voluntarily offer more than the advertised rent. These proposals are similar to legislation enacted in New Zealand in 2021.

The Renters’ Reform Coalition welcomed Starmer’s commitment to ban bidding wars. Tom Darling, the coalition’s campaign manager, remarked, “For this to be effective, it must include greater regulation of estate agents who often initiate bidding wars, exploiting our desperation for a secure home to maximize their profits.” 

He added that while banning bidding wars is important, renters also need protection from rent increases during their tenancy. “That’s why we’ve advocated for a cap on rent hikes tied to inflation and wage growth to close this loophole,” he explained.

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