The End to Rent Bidding Wars- Renters Rights Bill

The Renters Righ Bill, due to come into force this year, ends the practice of rental bidding by prohibiting landlords and agents from asking for or accepting offers above the advertised rent. Landlords and agents will be required to publish an asking rent for their property and it will be illegal to accept offers made above this rate.

Government interventions in price-setting historically tends not to end well. Despite a desire to protect tenants at the heart of drive to end rental bidding wars, it may unwittingly be fostering rent distortions in an already difficult market, potentially making matters worse.

While they sound good in theory, most economists agree that rent control have a negative impact in the long term as they tend to lead to a fall in the supply of rental accommodation. If landlords are not receiving market-level rents there is no incentive for them to stay in the sector, so they may decide to sell their properties or convert them to short-term lets. 

The fairest approach, is market forces where prices are determinded through genuine supply and demand, rather than creating restrictions which may be counter productive. Absoluteley, in the medium-long-term, more stock is urgently required, in the right geographical locations, to avoid rents being out of reach for many.  But, in the meantime, enforcing this prohibition could end up producing scewed headline rents, potentially negatively impacting tenants. 

If the Government does not address this issue, it is probable headline rents will increase in the short term.

https://www.gov.uk/government/publications/guide-to-the-renters-rights-bill/guide-to-the-renters-rights-bill#