No More Rental Bidding

The private rented sector in England has long been due for an overhaul and that’s finally taken place with the implementation of the Renters’ Rights Act. This legislation has set out many new reforms to be rolled out across three phases. The first of those took effect on 1^st May 2026. In this first phase, one issue that has been tackled is rental bidding.

For years, tenants have found themselves up against other applicants when trying to secure a new home. This has meant entering bidding wars, with rents becoming increasingly higher as tenants tried to get the properties they wanted. Now, with the first phase of the Act in place, these informal bidding wars are no longer permitted. With a fairer system in place, landlords must specify a rental price and cannot accept any offers above it.

The rental bidding ban promotes fairness and transparency in the private rented sector. It protects tenants from having to pay higher prices than are necessary or to lose the properties they are hoping to rent altogether because they have been outbid. But how does this new rule affect landlords? In this guide, we’ll explain why rental bidding has been banned, the new rules that landlords must adhere to, how landlords must now advertise the rent and how they can ensure they have set the right rent.

Rental bidding refers to multiple prospective tenants having to bid against each other to try to secure a property, offering more than the advertised rent. An informal process, this has been especially prevalent in areas where there’s a strong demand for rental properties. It occurs when either a landlord or letting agent encourages or actively asks for bids above an advertised price. This can include, among other forms, online listings, written adverts, printed materials, emails and social media posts.

Rental property is in short supply and high demand across England so it’s no surprise that prospective tenants have found themselves competing against each other to secure the housing they want. Where landlords or letting agents have encouraged or actively asked for bids, tenants have had no choice but to try to outbid each other.

This practice has considerably pushed up rents, affecting tenants’ affordability. In cases where tenants have already been stretched with their budgets, they’ve had to miss out on properties when they haven’t been able to afford to bid any higher than the advertised price. Others have felt pressured into bidding for fear of losing the property they want, impacting their future budget once they’ve secured a home.

With the ban on rental bidding, tenants now benefit from equal chances at securing rental properties rather than being limited by their income or their ability to negotiate. They no longer need to feel pressured into paying more than they can realistically afford. The stress of not knowing how much it will actually cost to secure a rental home is also removed. This is a much fairer and more transparent system.

It’s hoped that the removal of the bidding process in high-demand areas will also stabilise the market.

From 1^st May 2026, all rental bidding in the private rented sector has been prohibited. Instead, landlords and letting agents must state a clear asking rent when advertising a property. This must be a specific, fixed amount, not a rent range.

Rather than being a starting point that’s subject to negotiation as was previously allowed, the advertised rent cannot be exceeded. Tenants cannot be encouraged to bid against each other and higher amounts cannot be accepted, even if tenants voluntarily offer them. This means that landlords and letting agents need to carefully consider the rental amount before any marketing commences.

By banning the practice of rental bidding, tenants can now be assessed on their suitability instead of whether or not they are willing or able to pay more than was originally advertised. It should be noted that while landlords cannot accept a higher amount than the advertised price, they can accept a lower amount if they wish.

The requirement relating to the advertised rent applies to written adverts as well as written offers. Guidance provided by the government details the following as types of written adverts:

• Online listings
• Written adverts
• Printed materials
• Emails
• Social media posts
• Texts and direct messages

Implied higher rents are also not permissible under the Act. This is to protect against grey areas that could lead to bidding wars away from publicly advertised prices.

For example, landlords and agents cannot suggest that they will consider higher rents or tell prospective tenants that another party has offered a higher amount so as to increase the price. They cannot make reference to ‘offers over’ or a best or final offer and cannot accept any offer that exceeds the advertised rent amount. This includes not being able to accept a higher amount from a tenant who has offered more without being asked.

If a landlord or letting agent is found to have asked for, encouraged or accepted any bids higher than the advertised amount, they will be considered to be in breach of the Act. This can result in hefty civil financial penalties.

The advertised rent must be a clear, fixed figure. It is a final figure rather than a starting point so it’s essential to get it right before marketing the property. As a landlord, if you set the rent too low, you’ll be unable to correct it with competitive bidding. This will place a cap on your potential rental income until you are able to make an annual rent increase as per the new rules under the Act. If you set the rent too high, there will be limited interest in your property, leading to longer void periods and no rental income.

To set the right rent, you need to have good knowledge of the local market. Check comparable rental properties, taking the property size, condition and location into account. Be aware of the current demand from tenants. To help you get an accurate figure:

• Check listing sites for rental properties
• Use online property platforms that generate localised insights and data
• Get a professional valuation

Whilst the first two options are a good starting point for finding the right rent figure, a professional valuation by a letting agent is going to give you the most accurate figure. They can use their extensive knowledge of the area, understanding of the local market and comparable listings to ensure you set the right asking rent from the start. With a competitive price, you can minimise void periods while maximising your profitability.

Once you have begun marketing your property, the rental price must remain the same. This applies to all forms of advertising as well as during conversations with prospective tenants at viewings and in continuing discussions.

With the new rules that have come into effect under the Renters’ Rights Act – including the end of rental bidding, a cap of 1 month’s rent in advance, one permitted rent increase per year and the end of Section 21 ‘no fault’ evictions – you need to do everything possible to strengthen your position as a landlord. This means focusing on the quality of your tenants and putting systems in place to protect yourself in the long term.

Use stronger tenant screening

The more robust your screening process for tenants, the more you’ll minimise any potential risks in the future. Here are some essential factors to consider when looking for reliable tenants:

• Use a comprehensive affordability assessment. This entails checking a prospective tenant’s employment status and verifying their income. You need to ensure that they can comfortably afford the rent and can maintain these payments over the long term.
• Ask for a previous landlord’s reference. This should include details such as the tenant’s reliability with paying the rent, how they looked after the property and any disputes that may have arisen.
• Check their legal right to rent. It is a mandatory requirement in England to check that each person aged 18 or over who intends to live in the property has the legal right to rent.
• Carry out a credit search. This will reveal a prospective tenant’s financial history, helping you to ascertain whether they are likely to pay their rent on time and highlighting whether they have any credit issues, such as defaults and CCJs. A credit search helps you to minimise the risk of rent arrears and the subsequent eviction process.
• Conduct an in-person interview. Arrange to meet the prospective tenant in person to get a feel for their behaviour that simply checking paperwork can’t provide. If there’s a rapport between you, the prospective tenant is more likely to look after the property and less likely to cause issues with the rent.

If you prefer not to handle the tenant screening process yourself, ask a letting agent to do this on your behalf.

Ask for a guarantor

With the stricter controls that have come into force under the Renters’ Rights Act, some landlords are more cautious than they would have been previously. One requirement that has increased in demand is for tenants to have a guarantor.

A guarantor is someone who agrees to cover the rent payments if the tenant is unable to make them. They have to sign an agreement to this effect, making them legally liable for the rent payments. Requesting a guarantor is especially important if the prospective tenant is renting for the first time, is a student, has an irregular income or has a limited credit history.

Get rent guarantee insurance

With the new reforms affecting rents, it’s important to consider extra protection for your rental income. Rent guarantee insurance offers protection if your tenants stop paying the rent. It will cover a rental income up to a set monthly limit, payable for up to 12 months. This often includes legal expenses cover for a solicitor and court costs should you have to evict a tenant.

The legal costs can be extremely expensive and, coupled with the non-payment of rent, can leave you severely out of pocket if you don’t have financial protection in place. Rent guarantee insurance, therefore, is an essential financial safeguard, especially if you rely on the rental income to cover the buy-to-let mortgage on your property.

Landlords can no longer rely on pricing that’s driven by demand and the flexibility to choose tenants who are willing to pay more than others. This offers protection for tenants and makes the private rented sector a fairer and more transparent place. However, it makes it harder for landlords to achieve the best rental income and makes managing their financial risk more complex. Landlords now have to consider long-term strategies to help mitigate their risk and tenant selection must be a more thorough process.

As landlords have to set a fixed asking rent, they need to have a clear understanding of the rental market to ensure they don’t underprice or overprice their property. Once the figure has been set and the rental property has been listed, competing offers cannot be accepted to benefit from a higher rent. This means that landlords must conduct thorough research beforehand or ask a letting agent to carry out a professional valuation.

Accurate record-keeping is essential

Councils have been given increased powers to investigate and enforce the new reforms under the Renters’ Rights Act. As such, landlords must now keep accurate records regarding the asking rent. This can include evidence of how the rental figure was arrived at, such as copies of property adverts. Records of communications with prospective tenants must be kept, such as emails, letters and texts. This is vital because if the local council suspects that a landlord has breached the rules, they can request evidence. It’s essential to have this as the penalties for breaching the rules are severe.

Tenants can now benefit from a level playing field when looking for rental homes. They know that the advertised rent is what they’ll actually pay, rather than having to worry about how much the price might go up if they have to bid against others. This helps with affordability and removes the stress of having to pay more than is necessary to secure a home. By removing rental bidding from the equation, the process becomes much fairer and more transparent for tenants.

It’s essential to comply with the rental bidding ban because failure to do so can result in hefty financial penalties. Local councils now have enhanced powers to enforce the reforms under the Renters’ Rights Act. They can request evidence, such as copies of the rental adverts, the tenancy agreement, screenshots, a statement and communications with the tenants. If you are found to be in breach, you can be fined with a civil penalty of up to £7,000 for your first offence.

If you breach the rule again within 5 years, further penalties can be imposed. The first is a fine of up to £7,000 for that breach on its own. The second is another fine of up to £7,000 for repeating the same type of breach within 5 years.

It’s natural to feel concerned about the changes that have come into effect with the Renters’ Rights Act. However, they’re designed to make the rented private sector a fairer place. Tenants can now benefit from protections that have long been called for and rogue landlords will be forced to either meet the new standards or leave the sector altogether. This will make it easier and less competitive for professional landlords who already maintain high standards.

As long as you understand the reforms, such as the end to rental bidding, and how to act accordingly to minimise your risk, you should benefit from a smooth experience with your tenants. Our mortgage brokers are here to answer any questions you may have about your responsibilities under the Renters’ Rights Act.

It’s important to be proactive so let us know if you need advice on a long-term strategy in view of the new reforms, if you want to review your portfolio structure or if you’re interested in the refinancing options available to you. Just give us a call on 01322 907 000 to book a consultation with one of our mortgage and protection experts.