Labour’s plan to curb bidding wars under fire for loophole

Labour’s plan to curb bidding wars under fire for loophole

9:35 AM, 26th June 2024, About A week ago 13

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Labour’s plan to make bidding wars illegal contains a loophole, warns critics.

The Labour party has clarified it will stop letting agents and landlords from pushing bidding wars, but tenants can still make ‘voluntary’ higher offers above the asking price.

Tenant union group Acorn warns the loophole will make the policy “useless” and hurt tenants.

Rent prices have increased

According to the Financial Times, a senior Labour Party official says renters can choose to bid above the advertised rental price voluntarily to secure a property.

The Labour party official added: “The idea is that the agency can’t facilitate the bidding war to drive up the price on behalf of the landlord.”

Labour’s plans are inspired by policies implemented in New Zealand in 2021.

These policies prohibit landlords from prompting tenants to bid above the asking price but permit renters to offer higher prices as long as they aren’t pressured.

However, critics have pointed out that since the policy was introduced in New Zealand, average rent prices have increased.

Gigantic loophole will make policy useless

Tenant action group Acorn has criticised the loophole labelling Labour’s bidding war policy “useless”.

Acorn, said on X, formerly Twitter: “Labour’s proposed ban on rental bidding wars will contain a gigantic loophole to allow “voluntary” higher bids from tenants.

“A loophole of this size would render this otherwise sensible policy effectively useless. Expect pushback from the renters’ movement.”

Competitive bidding environment

Lucian Cook, head of residential research at Savills, told the Financial Times that the supply and demand imbalance is to blame for bidding wars.

He said: “Such is the shortfall of stock in the [UK] private sector, you’re always going to have a competitive bidding environment.

“Whether or not it is encouraged or invited strikes me as being sort of not the point.”


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Comments

NewYorkie

19:43 PM, 26th June 2024, About A week ago

It seems to have become a thing since lockdown, and mainly in the bigger cities where better paid employment supports higher rents. I haven't experienced it either, but haven't had a new tenant for 5 years.

Could it possibly be anything to do with a shortage of rental property, caused by landlords buggering off because they've had enough.

Peter Merrick

21:26 PM, 26th June 2024, About A week ago

Reply to the comment left by robert fisher at 26/06/2024 - 17:01
You are obviously ahead of the curve there, my friend!

Carchester

8:17 AM, 29th June 2024, About A week ago

The plan has its genesis in Marxist ideology.
Carchester

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