Labour wants to ban tenant bidding wars – landlord explains why that won’t work

Labour wants to ban tenant bidding wars – landlord explains why that won’t work

9:51 AM, 6th December 2023, About A year ago 89

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The Labour Party says it wants the UK to outlaw tenant bidding wars for rented homes, adopting a New Zealand policy, the Party’s Shadow Housing Minister, Matthew Pennycook, says.

Several Australian states have also apparently followed suit and Labour says the practice ‘creates a competition among tenants’ which only benefits the landlord.

Mr Pennycook says: “Those tenants who lose out on a property because of bidding wars are in a worse situation.

“And those who manage to get a property by that method are often stretched to the maximum of what they can pay.”

Labour now wants to amend the Renters (Reform) Bill that is working its way through Parliament.

‘Tenants outbidding each other’

And on 5 Live Breakfast, Nottingham landlord Mick Roberts was questioned by presenter Rachel Burden over the bidding practice, when she asked: “Do you get your tenants outbidding each other for your properties?”

Mr Roberts replied: “I do, and I’ve had that in the past, but I don’t get into it. But I can understand why other landlords are doing it.”

He was then asked why this situation is happening and Mr Roberts replied: “Well, you’ve got a shortage of landlords and since 2015 there’s been this anti-landlord rhetoric and the landlords are packing up like wildfire.

“And now you’ve got a supply and demand issue – and we never know what is coming next.”

‘Going to get to tenants bidding against each other’

He added: “For example, in Nottingham we’ve got a selective licensing charge of £900 and for some landlords, if they’re going to get to tenants bidding against each other, then they are going to take that bid.”

Along with the prospect of Labour banning tenants bidding for a rented property, Mr Roberts asked Ms Burden whether we should also ban bidding on the shopping site eBay and ban house sellers when bidding puts the price up.

Ms Burden asked: “Having somewhere to live is kind of a basic human right and need, isn’t it? And if people are being priced out of the market, this is really problematic.”

Mr Roberts replied: “I agree, but is it the landlord’s job to provide that basic human right?

“The landlord’s job is to provide a home – they are not a charity. It’s not the council providing that home, it’s not a housing association, it’s a human being. And he can take his money elsewhere.”

Landlord advertising a property at a certain price

Ms Burden said that a landlord advertising a property at a certain price will know that the amount covers all the landlord’s costs and gives a buffer zone.

She then asked: “Then maybe there should be a system whereby you don’t allow people to come in and offer over that price.

“So, in other words, the landlord isn’t losing out. But you’re equally being fair to the renters.”

Mr Roberts said: “Well, you just hit the nail on the head. The landlord knows he’s covering his costs, but he isn’t because he doesn’t know what is coming next.

“Labour is proposing rent caps and if you look at Scotland, where they’ve done the rent cap, tenants have ended up much worse off from that. Now the new tenants can’t get a house.

“And when the landlord comes to rent it out again, he charges the most. And that’s what is happening in these bidding wars.”

‘Wait and see all the parties different manifestos’

Ms Burden said: “Obviously, we’ll have to wait and see all the parties’ different manifestos as to how they’re going to deal with this.

“But I guess that’s always been the case for any landlord. There’s always going to be some uncertainty for landlords.”

Mr Roberts replied: “There’s not as much certainty now and most of us are aware that a lot of Labour are anti-landlord, but you get rid of the landlord, and you’ve got no houses.

“You know, they’ve been calling for landlords to pack up and more great landlords are packing up when given the choice.

“There will be lots of landlords fighting for tenants – my tenants can’t leave me anyway, you know, I’m probably one of the rare ones.

“I want to sell a lot of my houses, but I can’t because they can’t get anywhere because of things like this bidding war.”

‘I won’t leave them in that position’

He continued: “I won’t leave them in that position because I’ve got morals and a conscience.

“But a lot of landlords, it’s something like 60% of landlords, don’t give rent increases, but because we don’t know when the next tax is coming from, I’ve got to get in as much as I can because I just don’t know.

“There’s no certainty anymore. I can’t even look after a family anymore.”

Mr Roberts added: “Lots of landlords are packing up and the more you talk about banning bidding wars and landlords not refusing pets, you’ll have no landlords left.”

Accepts that bidding wars happen

The chief executive of the National Residential Landlords Association, Ben Beadle, told BBC’s Newsbeat that he accepts that bidding wars happen but says many problems in the private rental market are due to supply issues.

He said: “You can’t go around banning everything.

“What I would say is we need to look at what’s forcing people to make these decisions.”

A government spokesperson told the programme: “It is ultimately for landlords and tenants to agree the amount of rent that should be charged when a tenancy begins.

“Our Renters (Reform) Bill will deliver a fairer, more secure, and higher quality private rental sector for landlords and tenants.”


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Mick Roberts

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10:43 AM, 6th December 2023, About A year ago

Reply to the comment left by NewYorkie at 06/12/2023 - 10:31
That's it New Yorkie,

They think they have a right to live in our houses free cause we are this dreaded word Landlord. They forget we are human just like them & many of us have done without to start with, lost in the early years, to get it back later. And now they decide they only see the here & now & cause we a Landlord with a house, we must have been given it & it was all free, so they surely are entitled to it.

We could be their answer if they come asked us. I bought about 19 houses in 2008 all for Benefit tenants, many the tenants found theirselves for me to buy. We could all do that again if we were paid enough & not punished for doing the providing.

Mick Roberts

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10:44 AM, 6th December 2023, About A year ago

Reply to the comment left by Lee Bailey at 06/12/2023 - 10:33
Ooh yes good point, they get tenants bidding up to see who is the most desperate.

Steve Masters

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10:49 AM, 6th December 2023, About A year ago

Reply to the comment left by Mick Roberts at 06/12/2023 - 10:26
Bidding is a process that helps find a price when there is an imbalance between supply and demand. It can shift the price down as well as up, depending on whether there is an excess of supply or an excess of demand. Currently in the rental market we have an excess of demand and a shortage of supply.

The answer is not to fix prices but to encourage greater supply. Government needs to encourage landlords back into the market and I've said it before BUILD MORE HOUSES.

Beaver

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10:49 AM, 6th December 2023, About A year ago

Tenants are bidding on properties because they desperately want somewhere to live.

I just got this email from Spareroom.com.

"In the past 6 years, demand for rooms has increased by 53%, while supply has fallen by 31%. As a result, the average UK room rent has shot up by 22% (hitting record highs).

We desperately need more houses to be built, but while we wait for that to (hopefully) happen we could use our existing housing stock better. In England and Wales alone there are 26 million vacant bedrooms in owner-occupied homes. Renting out just 1.74% of these rooms would revert the renter-to-room ratio back to 2017 levels and, in theory, bring average UK room rents back to 2017 levels.

Renting out your spare room could help rebalance the market and make a huge difference to the housing crisis."

This government doesn't have the money to build houses. A new labour government won't have it either and all the left-wing policies tested out by the likes of the SNP government in Scotland will just make the situation worse.

The only smart thing that any incoming government can do is to allow us to invest our SIPPS in residential property; at the very least in EPC C+ housing if it really wants to incentivise climate change improvements.

Dave S

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10:52 AM, 6th December 2023, About A year ago

Well said Mick 👍

Mick Roberts

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10:52 AM, 6th December 2023, About A year ago

Reply to the comment left by Steve Masters at 06/12/2023 - 10:49
U should have gone on radio instead of me, u say it far better & shorter than me.

NewYorkie

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10:53 AM, 6th December 2023, About A year ago

Reply to the comment left by Mick Roberts at 06/12/2023 - 10:43
The state of the PRS sums up today's entitlement society.

We grew up in a council house in the 60s. No heating. No bathroom. No double glazing. Outside wc... But it was our home, even though we didn't own it, and we treated it as such. We installed our own gas fire, built a 'bathroom' in the garden (bloody cold walking across in winter, but better than the tin bath!), put our own carpets down, did our own painting and decorating... and not once did we ask for help, nor expect any.

Mick Roberts

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10:54 AM, 6th December 2023, About A year ago

Reply to the comment left by Beaver at 06/12/2023 - 10:49
Some good stats there

Mick Roberts

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10:55 AM, 6th December 2023, About A year ago

Reply to the comment left by NewYorkie at 06/12/2023 - 10:53
Yes,
They all entitled now aren't they. And Landlord must pay.

Beaver

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11:03 AM, 6th December 2023, About A year ago

Reply to the comment left by Mick Roberts at 06/12/2023 - 10:54
That's right. The price of rented rooms is going up as well and tenants are bidding on properties because they are desperate for somewhere to live. How can penalising people for putting a roof over somebody's head, as the SNP tried to do, do anything other than make that situation worse?

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