Labour Promises to End Rental Bidding Wars Amid Calls for Stronger Rent Controls

Labour pledges to eliminate rental 'bidding wars' – however, activists argue that the proposals merely make superficial changes

Labour has committed to abolishing rental bidding wars, drawing inspiration from nations such as New Zealand where such policies have been effectively put into place. Nonetheless, advocates urge the party to adopt broader measures, such as rent controls, to shield tenants from escalating rents.

Political correspondent @fayebrownSky

Wednesday, June 19, 2024, 11:

The Labour Party has promised to eliminate rental bidding wars in a move to tighten regulations on landlords should they come to power.

The proposal aims to prevent a scenario where tenants are forced to outbid each other with higher payments.

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Competition for rental homes has intensified due to a persistent lack of available properties.

According to a study by the New Economics Foundation thinktank, renters last year generally spent an additional £100 monthly beyond the listed rental price for their residences.

The specifics of the Labour Party's proposal have yet to be outlined, but according to Sky News, the party intends to examine examples from other nations like New Zealand, where similar policies have proven effective.

Under the regulations established in 2021, advertisements for rental properties must clearly state the asking rent, and landlords are prohibited from soliciting or suggesting that potential renters offer more than the advertised rate.

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This echoes a Labour modification to the now defunct Renters Reform Bill (RRB) proposed by the Conservatives, which required landlords to list a fixed rental price upfront and prohibited them from initiating or promoting offers that surpass this amount.

The RRB was put on hold when Rishi Sunak announced the general election, with the Labour Party promising to enact a more robust version should they succeed in securing leadership at Downing Street.

Labour has also proposed a ban on bidding wars and plans to limit the total rent that can be paid in advance.

The fierce rivalry for rental properties has led to some renters being asked to pay several months' rent upfront.

The specific cap that Labour might implement remains uncertain, although the party has advocated in the past for a cap of five weeks' rent on the majority of rental agreements, or six weeks' rent for properties with annual rents exceeding £50,000.

Their strategy encompasses prohibiting evictions without cause and ensuring legal safeguards for tenants against mold issues.

In their 2019 manifesto, the Conservative Party committed to eliminating no-fault evictions. However, earlier this year, they disclosed that this key promise would be postponed indefinitely due to judicial backlogs, a move perceived by many as a compromise to appease property owners.

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Activists argue that evictions that permit property owners to eject renters with just two months' notice without any specified cause have contributed to an increase in homelessness. Since the Conservative Party pledged to eliminate such evictions five years ago, approximately one million notices have been served.

Housing groups largely supported Labour's proposals but encouraged the party to adopt more extensive measures, such as implementing rent caps.

In recent years, rental costs across the UK have surged significantly, outpacing the growth in average wages. Residents of London have experienced a cumulative increase of more than 31% in rent since 2021, with comparable increases observed in other areas of England and Wales.

Jae Vail, representing the London Renters Union, stated that merely stopping bidding wars and large initial payments isn't sufficient to shield tenants from the effects of steep rent increases and exorbitant rental prices tied to inflation.

"Labour is only making minor adjustments to the UK's cost-of-living crisis, instead of directly addressing the issue of escalating rent prices. It's critical that we implement rent control immediately to guarantee that all residents in the private rental market have a stable home," he stated.

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Labour had earlier dismissed the idea of implementing rent controls, arguing that they could lead landlords to leave the market.

Angela Rayner, serving as both the deputy leader and the shadow housing secretary, declared that the party’s distinct proposal to construct an additional 1.5 million homes represents "the only true method" for reducing rental costs.

In her defense of the policies introduced on Wednesday, she stated, "Repeatedly, the Conservatives have neglected the needs of renters. Whether it’s the continuous postponements in addressing no-fault evictions or their inability to fix issues of dampness, cold, and mold in homes, the Conservative Party is letting down the working class.

"Tenants stand to gain from a Labour government."

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