Labour party figures’ desire to end tenant bidding wars is unworkable in practice, while unenforced legislation would not lead to any real improvement, according to a top property lawyer.

JMW’s David Smith says Labour’s recent comments echo Matthew Pennycook’s amendments that he unsuccessfully tabled to the Renters (Reform) Bill and are almost identical to a set of provisions in New Zealand.

These required landlords to advertise a property with the exact rent figure sought which in practice means that applicants can offer to pay more but cannot be asked or encouraged to do so.

Legislation of this kind is relatively easy to evade, adds Smith. “Landlords can simply increase the asking price to a sum greater than they ever expect to achieve and encourage tenants to bid up to that sum without asking them to bid over it - so properties simply get re-priced.”#

Impossible

He believes it would also be almost impossible to enforce. “It is not terribly difficult to convey to a tenant that they might well want to bid higher without ever asking for a bid over the advertised sum. I am no sales expert, but I can well imagine agents saying things like ‘this property was priced fairly low compared to the market, but we have had a lot of interest and some very strong bids’.”

That says nothing about the level that a tenant might want to bid themselves but conveys a strong impression that any offer needs to be at the top-end or above, says Smith. “Unless a tenant is actively going to record what is being said to them (and there are challenges with admitting evidence from covert recording in the UK) then it will come down to one person’s word against another.”