Tenant bidding wars lead to them paying £1,200 more

Tenant bidding wars lead to them paying £1,200 more

9:50 AM, 6th December 2023, About A year ago 7

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A survey has revealed that four in 10 households renting privately (39%) that moved within the last year are paying an average of £1,200 a year above the advertised rate for their property.

The findings from the New Economics Foundation (NEF) highlight the level of demand for falling numbers of homes to rent in England.

The survey of 1,001 people reveals how tenants are being dragged into bidding wars to pay more rent to find a home.

And the findings highlight that many renters are being priced out.

‘Data shows just how difficult it can be’

Alex Diner, senior researcher at NEF, said: “Everybody deserves to be able to afford a safe, secure and warm place to live, but this data shows just how difficult it can be for many people to find somewhere to call home.

“The lack of affordable housing across the country forces people to enter into bidding wars, which end up meaning the rent they pay goes through the roof.

“And all too often, the properties they end up living in are cold and damp, with landlords who are not always willing to help.”

He added: “Not only must the government stop backsliding on its commitment to reform the private rental sector, it also has an opportunity to make a real difference here.”

Mr Diner says that the government must ban tenant bidding wars and build affordable social homes to ease the pressures on the housing market,

‘Renters had to pay more than one month of rent upfront’

According to the poll, 45% of new renters had to pay more than one month of rent upfront to secure their home, 21% have seen their rent hiked mid-way through a tenancy without their agreement, and 38% of new private tenants live in homes suffering from damp or mould.

The findings also point to some of the unfair practices that private renters face when searching for a property, such as being illegally charged a fee to view the property (17%) or being asked for a copy of their CV (19%).

The NEF said that the poll results show the urgent need for stronger regulation and protection for private renters in England, who make up 20% of all households.


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10:09 AM, 6th December 2023, About A year ago

Banning bidding wars is a restriction on tenants as much as it is on landlords.

It removes an option from the tenants arsenal to meet their needs.

The tenants would have the right to pay more to secure the property they really want removed. It may be given to someone who pays the asking price but is ambivalent about the property.

In economic terms consumer surplus and producer surplus are reduced making everyone worse off.

Easy rider

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10:13 AM, 6th December 2023, About A year ago

Banning bidding wars would not increase the number of houses available to rent. It could encourage more landlords to switch to holiday lets leading to fewer rentals.

It’s time to tackle the cause taker than the symptoms.

Freda Blogs

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10:20 AM, 6th December 2023, About A year ago

To quote our friend and fellow LL Mick Roberts here: https://www.property118.com/labour-wants-to-ban-tenant-bidding-wars-landlord-explains-why-that-wont-work/

"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."

Spot on Mick.

LLs just want to choose the best tenant for the property - particularly with the loss of S21 etc, and it's seldom just about the money. There are other factors that influence the decision. Factors that LLs - who are taking the risk and who are the actual owners of the property - want to make for themselves.

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10:39 AM, 6th December 2023, About A year ago

Its short sighted, if tenants can't bid with money, they will have to bid with other things.

More intrusive checks, more rent in advance etc.

Jim K

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11:44 AM, 6th December 2023, About A year ago

Article says.
38% of new PRS tenancies suffer mould or damp.
Really.........

Tim W

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12:33 PM, 6th December 2023, About A year ago

Reply to the comment left by TheBiggerPicture at 06/12/2023 - 10:09
Not quite. Bidding wars minimise consumer/tenant surplus (the difference between the highest amount they would pay and what they have to pay) and maximise producer surplus/landlord (the difference between what they would accept and what they receive). Given this, it's not great for tenants as consumers.

Easy rider

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23:14 PM, 6th December 2023, About A year ago

Reply to the comment left by Jim K at 06/12/2023 - 11:44
It says,

“ 38% of new private tenants live in homes suffering from damp or mould”

It doesn’t say how many ‘new private tenants’ were surveyed. It doesn’t say how the data was verified and it doesn’t say WHY the properties are suffering from damp or mould.

82.6% of statistics are made up 😉

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