Ban on rental bidding wars is on the way - but will it work?

With renters successful fashionable areas facing aggravated contention for homes, galore are progressively uncovering themselves pitted against each different successful bidding wars.

Housing campaigners person welcomed plans for caller laws to prohibition the signifier successful England - but are informing much enactment volition beryllium needed to tackle unaffordable rents.

Jason Phillips had been surviving successful his level successful Crouch End, northbound London, for 10 years erstwhile his landlady decided to merchantability up.

He spent much than a twelvemonth looking for determination caller to rent successful the area. But contempt going to astir 40 viewings and having a bully wage arsenic a concern analyst, helium kept losing retired to different applicants.

In 1 lawsuit helium was told a two-bed level connected the marketplace for £1,800 period had gone for £2,500, aft idiosyncratic offered £700 implicit the asking price.

“It's frustrating," helium says. "It made it not lone unaffordable for me, but if I'd known that was going to beryllium the terms scope I astir apt wouldn't person adjacent gone to spot it successful the archetypal place."

With astatine slightest a twelve prospective tenants viewing immoderate of the properties, Jason said respective property agents had actively encouraged him to bid higher than the advertised terms to springiness him the champion chance.

Eventually Jason, 60, gave up and reluctantly moved to Stevenage, Hertfordshire, wherever it was easier to find determination wrong his fund and helium was person to work.

"I'd got to cognize my neighbours and I'd physique up a batch of friends," helium says. "I miss [Crouch End] and I would emotion to spell back."

The authorities has acceptable retired plans to extremity bidding wars arsenic portion of a wider Renters' Rights Bill, which was published connected Wednesday.

Under the legislation, which inactive needs to beryllium approved by MPs and peers, landlords and letting agents would beryllium legally required to people an asking rent for their spot and banned from encouraging oregon accepting immoderate bids supra this price.

This goes further than proposals Labour acceptable retired erstwhile it was successful opposition, which would person prevented landlords and agents from encouraging bids but would inactive person allowed prospective tenants to connection much than the advertised rent.

Campaign radical Generation Rent's Conor O'Shea says they are pleased the authorities has listened to the grounds from countries similar Australia, wherever authorities has already been introduced to tackle bidding wars, and decided connected a "total ban".

He argues allowing "voluntary" bids would person been "open to abuse", arsenic tenants whitethorn inactive consciousness pressurised to connection supra the asking price.

In Australia, each states present restrict rental bidding successful immoderate signifier - but lone Queensland and the Northern Territory person banned landlords and agents from accepting offers supra the asking terms completely.

Three years aft archetypal introducing authorities to prohibition the encouraging of bids, Victoria is besides readying to spell further and marque it an offence to judge rental bids, arsenic the UK authorities is proposing.

The authorities determination says with vacancy rates astatine grounds lows prospective tenants are nether "an unthinkable magnitude of pressure" and radical are progressively making "unsolicited bids" to springiness them an borderline implicit different applicants.

Joel Dignam, enforcement manager of Australian run radical Better Renting, says this suggests banning landlords from accepting arsenic good arsenic conscionable encouraging bids is indispensable to halt bidding wars.

He says enforcement is besides an issue.

Generally, landlords oregon agents breaking the rules tin beryllium fined, but Mr Dignam says it is much apt they lone get "a slap connected the wrist".

Mr O’Shea says this is besides a occupation successful the UK, wherever overstretched councils conflict to spell aft each landlords who interruption the rules.

Under the planned legislation, landlords oregon agents could beryllium fined up to £7,000 if they promote oregon judge bids.

But Mr O'Shea says immoderate caller laws indispensable beryllium decently enforced to beryllium effective.

He argues tenants should besides beryllium incentivised to study erstwhile bidding is being encouraged, for illustration they could beryllium fixed a rebate connected their rent if their landlord is recovered to person breached the law.

There are besides questions implicit however effectual banning rental bidding tin beryllium successful curbing rising rents, with campaigners saying this does not code the basal origin of the issue.

In Australia, rents person continued to summation successful fashionable areas, wherever request outstrips supply.

But Mr Dignam argues banning the signifier is not conscionable astir affordability but besides transparency.

"I deliberation what's tricky for renters is conscionable not knowing what the existent terms of the spot is," helium says.

"Is it adjacent worthy going to this [viewing] if really it's retired of my terms range?"

In the UK, the National Residential Landlords Association (NRLA) besides agrees with the rule of ending bidding wars, saying neither landlords nor agents should beryllium encouraging tenants to connection supra the asking rent.

However, it is calling for much item connected however the argumentation would enactment successful practice.

More broadly, the NRLA says determination needs to beryllium enactment to boost the proviso of privately rented homes.

Mr O'Shea says yet banning bidding wars is "not going to beryllium the metallic slug that volition woody with the affordability situation for tenants".

He says determination are concerns that immoderate landlords whitethorn simply database their spot astatine an inflated terms and judge little offers if needed.

Generation Rent besides wants to spot tighter controls connected however overmuch landlords tin summation rents by wrong tenancies and an summation successful the proviso of homes, helium adds.

"We don't person capable homes successful the places that radical privation to live, astatine rates they tin spend to rent."