A prominent lettings agent says banning agents and landlords conducting bidding wars for a rental property is not addressing the real problem – a shortage of supply.

A ban on the bidding wars is set to be part of the Labour government’s Renters Rights Bill, announced in this week’s Queens Speech and set to be launched in the autumn. 

But Allison Thompson, the national lettings managing director at the Leaders Romans Group, says this is tackling the wrong part of the issue.

“The proposal to end bidding wars misinterprets the issue, as these are driven by the fundamental dynamics of supply and demand rather than being a deliberate practice by letting agents. Any legislation aimed at curbing this would need to address the underlying market imbalance” she says. 

On broad goals of the new Bill, she adds: “Strengthening local councils’ enforcement powers to target rogue landlords is a commendable goal. However, the success of such measures will depend heavily on the availability of resources and funding. Effective enforcement requires substantial investment to ensure councils can carry out their duties thoroughly and consistently.

“Ultimately, a balanced approach that considers the needs and responsibilities of both tenants and landlords is crucial. This includes supporting landlords with the tools and frameworks needed to manage their properties effectively while protecting tenants’ rights and enhancing the overall stability of the rental market”.

She says it is imperative that the government prioritises the Renters’ Rights Bill to provide much-needed clarity for both landlords and tenants. 

“The housing sector faces uncertainty, and without swift action, landlords may opt to sell their properties, further exacerbating the current housing crisis. The Renters’ Rights Bill incorporates many elements from the previous Renters Reform Bill, yet critical issues remain unaddressed. Notably, there is no mention of the necessary court reforms which must precede the removal of Section 21. Efficient and effective legal processes are essential to manage disputes fairly and promptly” concludes Thompson.

And the chief executive of Foxtons – Guy Gittins – says that although the King’s Speech and its 40 new measures are collectively very positive for the housing sector, he is concerned about the Renters Rights Bill.

“It’s imperative that the Government gives serious thought as to how they can encourage new landlords to invest within the private rental sector, as this is sorely needed if we are to address the supply and demand imbalance that has been so prevalent over the last few years.”