Originally published: July 2025
Before their victory in the last general election, the Labour Party promised to eliminate bidding wars for rental properties.
They argued that they created an unfair situation in the rental market for prospective tenants, where rents were being “...driven through the roof.”
Whether or not this is a fair assessment of the Private Rented Sector (PRS) isn’t the point. As the demand for housing has steadily risen, so have average rent prices. Data from the December 2025 Goodlord Rental Index shows that rental prices across England have increased year-on-year by 2.4%.
These risks, in turn, compound the ongoing housing crisis, with some private renters being priced out of the lettings market. On the surface, banning the practice seems like a no-brainer.
However, well-intentioned policies can often have unintended consequences –and the government’s push to outlaw bidding wars is no exception. If landlords and letting agents can no longer accept bids on their properties, they will raise their initial asking price (more on the data behind this later).
Bidding wars occur when multiple prospective tenants make “bids” on rental properties that exceed the advertised asking rent. As tenants outbid each other to secure the property, a “war” breaks out, and the already inflated price continues to rise. This results in unfair and potentially exploitative situations, particularly for financially vulnerable tenants
Bidding processes tend to end the same way: one group of tenants outbids the other, and to the victor go the spoils (in this case, a charming two-bed in North London). These wars have increasingly become a feature of cities and towns across the UK, with data from the National Residential Landlords Association (NRLA) claiming that 10% of polled landlords had benefited from a bidding war.
In 2025, The Standard reported that almost one in five London renters had lost out on a property due to a bidding war. While this is personally disappointing for the tenant, it also indicates a few growing problems within the PRS.
Rental bidding wars in the UK are driven by several factors that we’ve listed below.
In towns and cities across the country, tenants tend to hear the same old story: there simply isn’t enough affordable housing to go around. Whether this claim accurately reflects the situation is beside the point, as tenants find themselves scrambling to secure housing.
This issue of supply and demand is felt most keenly in cities, where hopeful prospective tenants move in large numbers each year. According to a survey conducted by Cornerstone Tax, Southampton is the worst area for bidding wars, with 28% of renters being forced to participate in one to secure a property. Brighton follows this at 27%, London at 26%, and Manchester at 20%.
Despite promises and vague gestures from those in power, successive governments have failed to address this issue.
Since the end of 2021, UK interest rates have been steadily rising. In the same year, inflation reached its highest point in 40 years, prompting the Bank of England to raise the country’s base rate in an effort to combat the issue.
While the Bank of England did eventually start making cuts in August 2024, the markets have never quite been the same. This has made buying a house in the UK increasingly difficult.
The private rented sector has felt this squeeze as tenants who’d usually become homeowners have been forced to stay in their rental properties. This is supported by data from the Deposit Protection Service, which claims that renters are staying in their homes for an average of 1000 days.With the Renters’ Rights Act expected to become effective by May 1, 2026, many landlords face an uncertain future. No matter how you slice it, the Act will have an unimaginable effect on how agents and landlords do business.
In the face of this monumental change, some landlords have chosen to leave the market altogether. According to the State of the Lettings Industry report, 19% of landlords reported reducing the size of their portfolio, with 80% citing the Renters’ Rights Act as a reason. That could be a shocking blow to an already weary industry.
With fewer properties available to rent, competition amongst tenants will increase, and bidding wars will continue to squeeze the market.
Now that the Renters’ Rights Act has become law and is due to come into force from May 1, 2026, rental bidding wars will be formally banned in England. The government’s aim is to remove competitive rent escalation from the tenancy process and replace it with a clearer, more transparent way to set rents.
From May 2026, landlords and letting agents will need to advertise a clear asking rent when marketing a property. That figure will act as a ceiling, rather than a starting point for negotiation. By turning the advertised rent into a hard ceiling, the policy introduces a fair pricing at the point of listing.
Offers above the advertised price will no longer be allowed, even if a tenant offers more of their own accord. While landlords will still be free to accept a lower offer if they wish, choosing between tenants based on who bids the highest will become unlawful.
The Act also tackles subtler forms of bidding. Landlords and letting agents will be prevented from suggesting, implying, or hinting that a higher rent would improve a tenant’s chances of securing a property. The intention here is to remove grey areas where bidding wars could continue through private conversations rather than formal written offers.
Alongside this, the Act limits how much rent can be requested upfront. Landlords and agents will no longer be able to ask for more than one month’s rent in advance, reducing the scope for large upfront payments to be used as a workaround for bidding.
Responsibility for enforcement will sit with local councils. Where landlords or agents are found to have breached the rules, councils will be able to issue civil penalties of up to £7,000. These penalties can be applied more than once where breaches are repeated or ongoing.
Tenants will also have clear routes to challenge non-compliance. Where the rules are broken, renters can raise concerns with their local authority and seek resolution through the new Private Rented Sector Ombudsman, alongside existing letting agent redress schemes.
As the Renters’ Rights Act 2025 introduces wide-ranging reforms across housing law, it’ll be implemented in phases.
The ban on rental bidding will be introduced as part of Phase 1 of the Renters’ Rights Act and will take effect from May 1, 2026, alongside other significant reforms, such as the abolition of Section 21 “no-fault” evictions. The phased rollout is intended to provide tenants with early protection while allowing landlords, letting agents, and local councils time to prepare for the new enforcement regime.
The ban on bidding wars is part of the government’s goal of creating a fairer system for tenants in the PRS. It is, in the grand scheme of things, a commendable plan.
However, as with many well-intentioned policies, the plan does have its drawbacks. As William Reeve, CEO of Goodlord, said in an article for The Negotiator:
“Government interventions in price-setting rarely end well. Despite a desire to protect tenants at the heart of the bidding war ban, unwittingly encouraging pricing distortions in an already pressurised market will only make matters worse.”
Here are some of the consequences we believe could arise once the ban is in place.
Understandably, landlords want to ensure that they receive a return on their investment. A simple way for them to maximise their return is by listing their properties at a higher starting rent.
This is a familiar pattern in markets when the Government intervenes: landlords respond by setting higher initial prices to protect future income. In fact, according to The State of the Letting Industry report, 1 in 5 landlords (19%) are planning to increase advertised prices and will now set prices based on comparable listings.
This minority of landlords is likely to have an outsized impact on the wider market. As these higher prices begin to appear in comparable listings, many other landlords will either take a “wait and see” approach or follow the guidance of their letting agent, who will typically advise adjusting rents in line with the market. In practice, this means that the initial increases set by this 20% will not remain isolated: they will steadily reset expectations and benchmarks, putting upward pressure on rents across the board and ultimately driving broader price inflation in the rental market.
As we mentioned earlier, the UK is already facing a housing crisis due to growing demand and shrinking rental supply. With rising mortgage rates, tax changes, and regulations like the Decent Homes Standard and minimum EPC ratings, more landlords may choose to leave the sector.
As we mentioned earlier, this’ll only intensify the competition between tenants and drive up rents nationwide.
While some landlords prioritise stability when deciding on a tenant, others may prefer those who can afford higher rents. The idea is that tenants who can afford a higher rent will have the strongest financial profiles and therefore stay in the property for longer.
Discrimination is illegal, but a ban on bidding wars could drive some landlords and agents to become increasingly selective in who they rent to, as they may feel they’re not getting their ideal tenants. To ensure that their investment is protected, they may to choose a more in-depth referencing policy.
This would disadvantage tenants on benefits, students, or those with non-traditional income streams.
With the ban firmly on its way, the best time for you to improve your practices is now. This’ll help you stay compliant with the incoming legislation.
The ban on rental bidding wars aims to create a fairer process for tenants, but it’s unlikely to address the root issues of high demand, limited supply, and rising costs. Instead, we could see landlords raising their initial asking rents, increased competition for fewer properties, and more rigorous tenant vetting.
While the government’s intentions are well-meaning, the policy risks adding pressure to an already stretched Private Rented Sector. In his Negotiator article, William added:
“The best approach is to let the market determine fair rental prices through genuine supply and demand, rather than usher in artificial restrictions that could very well backfire in practice. Of course, in the long-term, we have to build more rental homes to stop costs spiralling out of control for ordinary renters. But, in the meantime, this loophole in the legislation could end up tightening the screw and leaving tenants in a bind.”
For landlords and letting agents, the key is adaptation. Setting realistic rents, focusing on long-term, reliable tenants, and ensuring transparent, compliant practices will be vital to navigating these changes. By staying informed and proactive, those in the PRS can continue to thrive despite the challenges brought by the Renters’ Rights Act and other ongoing reforms.
This article is intended as a guide only and does not constitute legal advice. Visit gov.uk for more information.
Yes. From May 1, 2026, landlords and letting agents will need to include a clear asking rent wherever a property is advertised. This applies across online portals such as Rightmove and Zoopla, as well as social media listings, brochures, and printed marketing materials.
No. Responsibility for complying with the ban lies entirely with landlords and letting agents. Tenants won’t be penalised for offering a higher rent. However, landlords and property agents must not accept or act on such offers, even if they’re made voluntarily.
No. Housing is a devolved matter, and the ban on rental bidding will apply only in England. It’ll cover privately rented homes under the Renters’ Rights Act 2025, but won’t extend to social housing or supported accommodation.