Labour vows to end rental ‘bidding wars’ – but campaigners say plans only ‘tinker at the edges’

The Labour Party has vowed to end rental “bidding wars” as part of a crackdown on landlords if it gets into government.

It said the measure would stop renters being pitted against each other “in a fight to see who can offer up a bigger sum”.

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Bidding wars for rental properties have become increasingly common amid a chronic shortage of supply.

Last year tenants typically paid an extra £100 a month above the asking price for their home, according to research by the New Economics Foundation thinktank.

Details of how Labour’s plan would work in practice have not been confirmed, but Sky News understands the party will look at other countries where this policy has been successful, such as New Zealand.

There, under rules introduced in 2021, the desired rent must be included in adverts for the property and landlords cannot invite or encourage prospective tenants to pay any more than the stated amount.

This is similar to a Labour amendment to the Conservatives’ now dead Renters Reform Bill (RRB), which stated that landlords must advertise a single rent figure in advance and be prevented from creating or encouraging bids that exceed that price.

The RRB was shelved when Rishi Sunak called the general election, with Labour vowing to pass a strengthened version if they win the keys to No 10.

As well as outlawing bidding wars, Labour said they would cap the amount of rent that can be paid upfront.

The extreme competition for a property has seen some tenants facing demands for months of rent to be paid in advance.

It is not clear what cap Labour could introduce, but the party previously pushed for a limit of five weeks’ rent for most tenancies or six weeks’ rent for tenancies of more than £50,000 rent per year.

Their plans also include a ban on no-fault evictions and legal protections for tenants when it comes to mould.

The Tories had promised to ban no-fault evictions in their 2019 manifesto, but earlier this year announced that the flagship pledge would be delayed indefinitely pending court delays – in what was widely seen as a concession to landlords.

Campaigners say the evictions, which allow landlords to kick out tenants within two months for no reason, has fuelled a rise in homelessness – with one million of these notices issued since the Tories made the promise to ban them five years ago.

Housing organisations generally welcomed Labour’s plans but urged the party to go further and introduce rent controls.

Average UK rents have been increasing well above average wage rises in recent years, with Londoners facing cumulative increases of over 31% since 2021 and similar rises in other parts of England and Wales.

Jae Vail, a spokesperson for the London Renters Union, said ending bidding wars and massive upfront payments does not go far enough “to protect renters from the scourge of inflation-busting rent hikes and outrageous asking prices”.

“Labour is tinkering at the edges of the UK’s affordability crisis when it should be tackling rising rents head on. We urgently need rent control to ensure everyone living in the private rental sector has a secure place to call home,” he said.

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Labour previously ruled out rent controls, saying they risk landlords exiting the market.

Angela Rayner, the deputy leader and shadow housing secretary, said the party’s separate plan to build 1.5 million more homes was “the only real way” to make renting more affordable.

Defending the measures outlined on Wednesday, she said: “Time and time again, the Tories have failed to stand up for renters. From endless delays to no-fault evictions, to failure to sort damp, cold and mouldy homes, the Conservatives are failing working people.

“Renters will be better off with Labour.”