The UK government’s upcoming ban on rental bidding wars marks a major shift for the Private Rented Sector (PRS). With the Renters’ Rights Bill on the horizon, this move is set to change how letting agents and landlords operate and it could have ripple effects far beyond its intentions.

In this post, we explore what bidding wars are, why they are being outlawed, what this means for all stakeholders in the rental market, and how to prepare for the changes ahead.

What Are Rental Bidding Wars?

Bidding wars occur when multiple tenants offer above the asking rent in hopes of winning a property. Rather than accepting tenants based on suitability or order of enquiry, landlords and agents are incentivised to choose the highest bidder.

The National Residential Landlords Association (NRLA) reports that 10% of landlords have participated in such practices. Meanwhile, a 2024 study by The Negotiator found nearly 1 in 5 tenants had lost a property due to bidding wars highlighting just how widespread this issue has become.

Why Have They Become So Common?

1. An Ongoing Supply and Demand Crisis

There simply aren’t enough affordable rental homes. In cities like Southampton (28%), Brighton (27%), and London (26%), bidding wars have become a frequent, frustrating reality.

2. Interest Rates and Homeownership Delays

Since late 2021, rising interest rates have made homeownership less attainable. As mortgage costs increased, would-be buyers remained in rental homes longer. The Deposit Protection Service now estimates renters stay in properties for an average of nearly three years.

3. Landlords Are Leaving the Sector

With the Renters’ Rights Bill looming, many landlords are exiting the market. In May 2025, Landlord Today reported that 25% of landlords planned to sell off some or all of their properties in the next year shrinking the rental stock even further.

Why Are Bidding Wars Being Banned?

Ahead of their landslide general election victory, the Labour Party pledged to eliminate bidding wars from the rental market, branding them unfair and inflationary. The logic was simple: when multiple tenants try to outbid one another, rents soar, and affordability suffers.

According to the June 2025 Goodlord Rental Index, rents across England have already risen 3.2% year-on-year. In cities like London, Manchester, and Brighton, it’s not unusual for renters to be pitted against each other just to secure a place to live. The situation reflects deeper issues in the PRS mainly high demand and low supply.

What Could Go Wrong with the Ban?

While banning bidding wars is designed to protect tenants, the policy may unintentionally fuel further challenges in the market.

Higher Asking Rents

Landlords who can’t accept above-asking offers may simply raise the initial rent price. This could lead to an overall increase in listed rents ironically undermining the policy’s purpose.

Further Reduction in Supply

With more regulation and fewer incentives, landlords may continue exiting the market, reducing available rental stock and intensifying competition.

Stricter Tenant Referencing

In the absence of competitive bidding, landlords may become more selective, favouring tenants with the strongest financial profiles. This could disadvantage groups such as students, those on benefits, or renters with non-traditional incomes.

Compliance Tips: How Letting Agents and Landlords Can Prepare

With the ban on the way, now is the time to adjust your processes and future-proof your practices:

• Set Realistic Rents: Use local market data to determine fair, evidence-based pricing.
• Focus on Tenant Quality: High rents don’t always equal high reliability. Balance financial criteria with stability and communication.
• Think Long-Term: Sustainable tenancies benefit both parties. Good relationships reduce churn, void periods, and management costs.

Final Thoughts: A Step Forward or a False Start?

The ban on bidding wars aims to level the playing field but without addressing the root causes of housing inequality (high demand, limited supply, and affordability), it could lead to higher rents, tougher access, and increased pressure on both tenants and landlords.

For landlords and letting agents, the key will be staying agile. Adapt your pricing, update your compliance processes, and focus on fostering positive, stable tenancies. The changes are coming and those prepared to meet them head-on will be best positioned to thrive.

The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances.

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