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.
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.”
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.”
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.”
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.”
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.”
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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Crouchender
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Sign Up9:46 AM, 9th December 2023, About A year ago
Reply to the comment left by David Nichols at 09/12/2023 - 09:32
As I said it can't be policed as they thats the problem in Australia.
It's a PR sound bite to get the tenant vote.
Expect more gesture politics next year
Crouchender
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Sign Up9:57 AM, 9th December 2023, About A year ago
Reply to the comment left by David Nichols at 09/12/2023 - 09:32
When I apply for my selective licence the council ask for copy of AST. I redacted the rent paid as this is a private transaction with me and my tenant and I do not have permission to disclose financial arrangements to others apart from their names. So you are right this is idiotic but tenants hear the narrative from labour and will vote for them blindly.
David100
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Sign Up10:07 AM, 9th December 2023, About A year ago
Reply to the comment left by GlanACC at 09/12/2023 - 09:42
The Government should buy up any unwanted rentals (with tenants in-situ) at fair market rates. Loads of landlords would be happy to sell up (myself included). Then the government can show us what great landlords THEY are.
JeggNegg
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Sign Up15:01 PM, 9th December 2023, About A year ago
Reply to the comment left by Beaver at 07/12/2023 - 10:15
Beaver. I have been making that same comment for years. Why is it such a bad idea to allow all Pension funds to invest a percentage of the fund into RESIDENTIAL PROPERTY.
If there are negatives to this idea please can someone explain and aire them.
If there are no major negatives should we not be petitioning our MP’s?
Or can we invest in quoted ltd. Companies that build resi properties ?
Beaver
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Sign Up9:46 AM, 11th December 2023, About A year ago
Reply to the comment left by JeggNegg at 09/12/2023 - 15:01
When the discussions about removing our rights to deduct our finance costs were going on part of the rationale given was to try and prevent another housing boom. But since the last housing bubble we've seen growth in our population.
And the truth is there's now a boom in rents due to high interest rates and lack of supply of rental accommodation. The country actually needs a boom in high energy efficiency housing that generates more of its heating from renewables. The UK government(s) can't afford to provide it because they overspent on Covid (and they all underperformed, regardless of their political persuasion).
The only place where there's enough money to make a difference is in UK pensions. So why not let us invest our SIPPs in high energy efficiency residential housing and in retrofitting our existing housing stock?
NewYorkie
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Sign Up10:58 AM, 11th December 2023, About A year ago
Reply to the comment left by Beaver at 11/12/2023 - 09:46
Been moaning for years about not being able to hold residential property in my SIPP, although you can at least get involved in property development in a SASS [if you're Ltd].
As for all the energy efficiencies UK houses need, who will do the work? We are already seeing shoddy, overpriced 'green' work, and I can envisage a point, not too far in the future, where massive amounts of work done will need to be replaced.
Beaver
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Sign Up14:24 PM, 11th December 2023, About A year ago
Reply to the comment left by NewYorkie at 11/12/2023 - 10:58
I agree that there can be a problem with shoddy work; many of us who experienced the effects of the recent changes making EPCs compulsory found that both the assessments and the work that we had done as a consequence of this new regulation was a mixed bag. And most tenants don't care about the EPC system.
But tenants do care about their energy bills. They do care about rents going up. Above all, they care about having somewhere to live which is why tenants (not landlords) are raising rents to secure somewhere.
I was never a fan of Gordon Brown but even Gordon Brown understood that the UK economy is driven by the housing market. If the UK governments want growth they are going to have to let the housing market drive that. The only place there's enough money to do that is in UK pensions. If we could invest directly via our SIPPs or SSAS schemes more of us would do it. Many landlords have been investing in residential property to supplement their pensions anyway. What we are seeing at the moment (tenants raising rents in order to secure somewhere to live) is the end result of various governments penalising a socially-useful activity.
If I want to do it I can invest my SIPP in pharmaceutical companies producing anti-depressants that increase the risk of suicide in young adults. What I can't do is invest my SIPP in somewhere safe where those young adults might live and do something constructive with their lives.
NewYorkie
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Sign Up16:45 PM, 11th December 2023, About A year ago
Reply to the comment left by Beaver at 11/12/2023 - 14:24
I've had an investment in global energy (fossil fuels) for a few years, and it's done well!
Beaver
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Sign Up16:57 PM, 11th December 2023, About A year ago
Reply to the comment left by NewYorkie at 11/12/2023 - 16:45
Congratulations. You'd have been allowed to invest in Shell, BP or Exxon as well however well they were or were not doing on protecting marine ecoystems.
But if you'd wanted to invest your SIPP in a category A residential property meeting passiv haus standards with photovoltaics, a ground-source heat pump and heat-recovery ventilation you'd have been hit with a 55% tax charge and your SIPP provider would have been penalised as well.