Housing

Renters paying £1,200 more for a home due to unjust bidding wars: 'Rent is going through the roof'

Renters are paying an average of £1,200 a year over the advertised rate for their home, polling from the New Economics Foundation has found

renting

Labour has called for a ban on bidding wars in the private rental market. Image: Karolina Grabowska / Pexels

Almost four in 10 renters who moved into their home in the last year faced a bidding war to secure the property, a new poll has found.

Tenants typically paid an extra £100 – or £1,200 a year –  above the asking price for their home, think tank the New Economics Foundation’s (NEF) survey of 1,001 people across England uncovered.

One fifth of private tenants also experienced rent hikes midway through their tenancy as renters have struggled in the face of record-high rents alongside the wider cost of living crisis.

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Labour has called for a ban on bidding wars to stop tenants being priced out.

“Rental bidding wars pit tenant against tenant with landlords the only winner,” said shadow housing minister Matthew Pennycook.

The Tory Renters Reform Bill is silent on the issue. A Labour government will act to prohibit bidding wars just as other countries like New Zealand have already done.”

The NEF poll found 45% of new private renters had to pay more than one month of rent upfront to see off other prospective tenants and secure their property.

Around 17% were charged to view a property while 19% were asked for a copy of their CV when trying to rent a home.

The housing crisis means tenants are facing stiff competition to secure affordable housing and it’s sending rents skyrocketing to new highs.

The latest Office for National Statistics figures show rents rose 6.1% across the UK in the year leading up to October.

Alex Diner, senior researcher at NEF, said: “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. 

“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. In the short term, ministers must take action to ban these bidding wars. In the long term, building a new generation of high-quality, genuinely affordable social homes would ease the pressures on the housing market and provide people across the country with somewhere to live, rest and flourish.” 

Ben Beadle from the National Landlords Association told the BBC he opposed the ban and called for supply issues in the private rental sector to be resolved instead.

The Big Issue’s End Housing Insecurity Now campaign called on Rishi Sunak to protect millions of low-income renters by reforming universal credit and scrapping no-fault evictions through the Renters Reform Bill.

The campaign successfully lobbied Jeremy Hunt to raise local housing allowance – the chancellor announced rates will cover the bottom 30% of properties from April next year.

We’re calling on the prime minister to make sure everyone can afford to stay in their homes and pay for the essentials. Will you join us and sign the petition?

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