An online blog has accused some letting agents of trying to circumnavigate the Renters Rights Act by allowing landlord clients to stage “inverse bidding wars.”
London Centric says the idea works like this.
Agents and their landlords advertise vacant properties at substantially higher rents than before and – to quote one agent cited in the story – “expecting a lower offer or just taking a stab in the dark and hoping that people would pay.”
How high the advertised rent went depended on the landlord, with the agent telling a writer on the blog that some were “going crazy and putting the rent really high, and some were doing it just a little bit higher than what their current tenants were paying”.
London Centric says the intention of the bidding war ban within the Renters Rights Act was that renters would not compete.
But it adds: “What wasn’t made illegal was accepting an offer beneath the advertised price. As a result landlords and estate agents have responded by enormously increasing the advertised prices for flats.
“The landlord’s initial hope is that a potential tenant is panicked enough to pay over the odds. If not, prospective tenants are encouraged to view a property out of their price range then told to put in a bid below the asking price — creating a inverse blind auction where the objective is to try to work out how low your rival bidders have gone, then bid slightly above that.”
London Centric claims to have contacted over 12 letting agents to inquire about renting.
“We were repeatedly encouraged to view properties advertised as being well out of our stated price range. Time and time again letting agents told us that the landlord would definitely consider offers under the asking price” the blog claims.
The online story also suggests that some landlords are seeking prospective tenants to agree to a one-off payment for their bills to cover the “entire tenancy period” – even though with a rolling tenancy under the Renters Rights Act, its final duration is uncertain.
The article quotes a Shelter spokesperson saying: “With the Renters Rights Act finally in force, gone are the days when landlords could demand tenants cough up huge sums of rent up front, or hit the road.
“Seeing the back of these ludicrous upfront costs is hugely welcome, but the government cannot leave room for loopholes.
“Unscrupulous landlords must be prevented from flouting the law or finding cynical workarounds to continue cashing in on tenants’ basic need for a home.”
You can see the article here.
