THE PROPERTY FILTER TAKE
The Renters' Rights Act now bans rental bidding wars, making advertised rents a legal ceiling rather than an opening position.
Landlords who overprice risk extended void periods; those who underprice could lock themselves into a below-market rate with no route to correct it mid-tenancy.
You may wish to run a local comparables review before listing any property and use a stress test to check yield viability at your target rent before the advert goes live.
The ban on rental bidding wars is now in force under the Renters' Rights Act (RRA), and it changes a fundamental pricing mechanic that landlords have relied on for years. Regulation expert Zach Hayward-Jones, speaking to insurer Simply Business as reported by PropertyWire, says landlords and letting agents must exercise greater care when setting asking rents because those rents are now treated as maximums, not starting points.
What Does the Bidding Ban Actually Mean in Practice?
Under the RRA, advertised rents are final. The previous practice of listing a test price to gauge demand - and then negotiating upward once competing bids came in - is prohibited. In practice this means landlords have one shot to price correctly before a tenancy begins.
Hayward-Jones explains the problem clearly. "In the past, landlords could use an initial asking rent to test demand and see what tenants were willing to pay, eventually landing on a monthly cost that worked on both sides," he said. "But now there's less room for trial and error, which raises the risk of charging too much and putting potential tenants off - or undercharging and being locked into a below-market rate."
Both outcomes carry a direct financial cost. Overpricing extends void periods (the time between tenancies when no rent is collected). Underpricing locks the landlord into a below-market return with no correction mechanism mid-tenancy. Neither outcome was acceptable before the RRA. Both are now harder to escape.
Who Must Comply, and What Counts as Non-Compliance?
The prohibition applies to landlords and letting agents operating in the private rented sector in England. The RRA is already in force; this is not a pending change. Any letting agent or landlord who accepts or solicits offers above the advertised rent is at risk of enforcement action.
Broader RRA enforcement is already under way. Recent penalties issued to landlords for safety breaches - cited by PropertyWire - signal that regulators are prepared to act. Landlords with multiple properties may wish to review their letting agent agreements to confirm agents are not accepting above-asking offers on their behalf, since liability can flow both ways.
Rent increases across the sector have already started to slow. Data cited by PropertyWire shows rent increases dropping 23% following the introduction of the RRA. Whether that trend holds will depend partly on how accurately landlords price from the outset.
How Should Landlords Set Rents Now?
Hayward-Jones is direct: comprehensive market research before listing is "non-negotiable". He recommends comparing similar local properties and assessing property condition, location, and available amenities before setting a figure. "Make sure you land on a realistic amount before your advert goes live," he said.
Building in a speculative buffer above market rate is no longer a viable approach. The penalty for overpricing is a longer void; the penalty for underpricing is a suppressed yield with no exit until the tenancy ends. You may wish to use Property Filter's stress test calculator to check whether your target rent covers costs and delivers an acceptable yield before committing to an advertised figure.
For landlords unfamiliar with the full scope of RRA changes, the business and systems blog covers compliance requirements in detail. A broader review of your property investment strategies may also be worth running given the regulatory direction of travel. Additional tools and guidance are available in the free resources hub.
Key Takeaways
The rental bidding ban takes effect under the Renters' Rights Act (RRA), which is already in force in England.
Advertised rents are now legal maximums - agents and landlords who accept above-asking offers face enforcement risk.
Rent increases have dropped 23% across the sector since the RRA came into force, according to PropertyWire.
You must set a correct asking rent before listing; there is no compliant route to adjust upward once advertised.
Consider running a local comparables review and a yield stress test before every new listing.
The ban on rental bidding wars is now in force under the Renters' Rights Act (RRA), and it changes a fundamental pricing mechanic that landlords have relied on for years. Regulation expert Zach Hayward-Jones, speaking to insurer Simply Business as reported by PropertyWire, says landlords and letting agents must exercise greater care when setting asking rents because those rents are now treated as maximums, not starting points.
What Does the Bidding Ban Actually Mean in Practice?
Under the RRA, advertised rents are final. The previous practice of listing a test price to gauge demand - and then negotiating upward once competing bids came in - is prohibited. In practice this means landlords have one shot to price correctly before a tenancy begins.
Hayward-Jones explains the problem clearly. "In the past, landlords could use an initial asking rent to test demand and see what tenants were willing to pay, eventually landing on a monthly cost that worked on both sides," he said. "But now there's less room for trial and error, which raises the risk of charging too much and putting potential tenants off - or undercharging and being locked into a below-market rate."
Both outcomes carry a direct financial cost. Overpricing extends void periods (the time between tenancies when no rent is collected). Underpricing locks the landlord into a below-market return with no correction mechanism mid-tenancy. Neither outcome was acceptable before the RRA. Both are now harder to escape.
Who Must Comply, and What Counts as Non-Compliance?
The prohibition applies to landlords and letting agents operating in the private rented sector in England. The RRA is already in force; this is not a pending change. Any letting agent or landlord who accepts or solicits offers above the advertised rent is at risk of enforcement action.
Broader RRA enforcement is already under way. Recent penalties issued to landlords for safety breaches - cited by PropertyWire - signal that regulators are prepared to act. Landlords with multiple properties may wish to review their letting agent agreements to confirm agents are not accepting above-asking offers on their behalf, since liability can flow both ways.
Rent increases across the sector have already started to slow. Data cited by PropertyWire shows rent increases dropping 23% following the introduction of the RRA. Whether that trend holds will depend partly on how accurately landlords price from the outset.
How Should Landlords Set Rents Now?
Hayward-Jones is direct: comprehensive market research before listing is "non-negotiable". He recommends comparing similar local properties and assessing property condition, location, and available amenities before setting a figure. "Make sure you land on a realistic amount before your advert goes live," he said.
Building in a speculative buffer above market rate is no longer a viable approach. The penalty for overpricing is a longer void; the penalty for underpricing is a suppressed yield with no exit until the tenancy ends. You may wish to use Property Filter's stress test calculator to check whether your target rent covers costs and delivers an acceptable yield before committing to an advertised figure.
For landlords unfamiliar with the full scope of RRA changes, the business and systems blog covers compliance requirements in detail. A broader review of your property investment strategies may also be worth running given the regulatory direction of travel. Additional tools and guidance are available in the free resources hub.
Key Takeaways
The rental bidding ban takes effect under the Renters' Rights Act (RRA), which is already in force in England.
Advertised rents are now legal maximums - agents and landlords who accept above-asking offers face enforcement risk.
Rent increases have dropped 23% across the sector since the RRA came into force, according to PropertyWire.
You must set a correct asking rent before listing; there is no compliant route to adjust upward once advertised.
Consider running a local comparables review and a yield stress test before every new listing.
Frequently asked questions
Frequently asked questions
When did the rental bidding ban take effect?
Does the ban apply to letting agents as well as landlords?
What happens if a tenant voluntarily offers more than the asking rent?
What is the practical risk of underpricing?
What should I do before advertising a rental property?
