Should lettings agencies stop tenant bidding?

A Bristol-based lettings agency has agreed to stop potential tenants bidding against each other to secure rental properties after prompting by community activist group Acorn. As a landlord, you may be wondering if this is a rising trend or a one-off? Should lettings agencies stop tenant bidding? Ian Speirs, our lettings and property management officer, who has 10 years’ experience in the property sector, answers your questions on the matter:

This is definitely a contentious issue, but sadly not one that can be realistically avoided. From the perspective of being champions for tenants, it is clear why Acorn would want this to be a realistic option. But the reality is that we, as lettings agents, work for the landlord and it is in the landlord’s best interest to accept the best offer.

In a market where demand is high and supply is low, this problem will always occur. Landlords will be inundated with offers and so tenants will need to set themselves ahead of the competition in order to secure the property. On the flipside of this, when there is high supply and low demand, you’ll see landlords compete with one another in order to bag themselves a tenant. They may offer additional incentives such as complimentary gym memberships, vouchers for meals out or even reducing the rent for a fixed term.

Acorn is nobly looking to protect new tenants, particularly in a market where rents have shifted upwards significantly. A property that will have been at the top end of someone’s affordability previously will now be beyond reach and if they are stretching to achieve a mediocre property at an expensive rate and they’re being outpriced by alternative offers, it will be a really bitter pill to swallow.

However, to accept offers on a first come first serve basis, which would be the default position if competing offers are not appropriate, would effectively deprive a landlord on a potentially better offer, whether by more rental income or a longer/better tenancy.

What about for prospective tenants?

When looking to make an offer to rent a property, particularly in the current market, tenants need to put themselves in their prospective landlord’s shoes. A landlord is looking for the model tenant and for someone who’ll rent perhaps beyond the initial six month tenancy. If you’re willing to commit for a longer tenancy, let your landlord know! Landlords are also interested in who will be living there and what kinds of jobs the tenants may have. If this is your dream home, and you know the property is sought after, consider making a higher offer to rent the property, but tenants should only do so if you they can afford it.

What are your thoughts? Do you agree with potential tenant bidding?