Among the many changes introduced by the Renters Rights Act 2025 is a new prohibition on the practice known as “rent bidding”. For the uninitiated, this is the process by which prospective tenants put in offers above the advertised rental price of the property, which can subsequently be let to the highest bidder.
Madeleine Southey considers some potential unintended consequences.
Section 56 Renters’ Rights Act 2025 prohibition on ‘rental bidding’
Section 56 of the Renters’ Rights Act includes the “Requirement to state rent and to avoid rental bidding”.
This section prohibits advertising a letting unless: “(a) the rent that is to be payable under the letting is a specific amount (the “proposed rent”), and (b) the advertisement or offer states the proposed rent” (s.56(2)).
Subsection (3) prohibits the landlord from inviting or encouraging people to put in offers above the advertised rent or accepting an offer to pay a higher amount of rent.
Will s.56 really benefit tenants?
On the face of it, s.56 seems like a positive change for potential tenants.
Landlords will be discouraged from advertising properties with an artificially low rent to attract a wider pool of interest.
Tenants searching for rental properties can avoid:
- wasting time viewing and putting in offers for premises that will be let for a significantly higher sum
- being pressured into paying more than they wanted for a property they are interested in once engaged in negotiations.
Potential repercussions with this prohibition on rent bidding
There is a concern that the introduction of s.56 could result in greater discrimination against prospective tenants.
Previously landlords with multiple interested candidates could justify their choice of tenant on the objective measure of who is offering the most money.
However, barring this route puts greater pressure on the landlord to select their tenants based on more nebulous and potentially discriminatory criteria, such as who they deem to be a more reliable or trustworthy tenant.
This arguably opens the door for preferential treatment on the basis of factors such as age, sex, race or nationality, and so forth.
Protections against discriminatory letting practices
There are additional protections in the Renters’ Rights Act aimed at combatting discriminatory letting practices.
Sections 33-34 deal with discrimination on the basis that a tenant has children or is in receipt of benefits.
However, these sections only relate to preventing such people from enquiring about the property, accessing information about it, viewing it or entering into a tenancy.
They don’t create any framework for ascertaining the reasoning behind preferring one tenant over another. In any event, s.41, quite fairly, confirms that there is no prohibition on taking a person’s income into account when considering whether they could afford to pay the rent.
In fairness, it could be said that the landlord’s right to choose who they let their property to is a fundamental aspect of their ownership of the property.
Overly regulating or scrutinising this process could have negative repercussions, including reducing the pool of properties available, locking landlords into tenancies with “bad” or unreliable tenants, and creating vast amounts of litigation at the expense of property owners and the public purse, using up court time and resources, if courts were required to look into the reasoning behind the particular choice of tenants.
Furthermore and in any event, the absence of this protection before the Act came into force did not prevent landlords from taking other factors into account when selecting tenants.
Landlords undoubtedly routinely factored in considerations other than the amount of rent offered when choosing who to let their property to. However, there is no doubt that financial benefit is a key determinative factor for any commercially-minded landlord, the removal of which will inevitably bring other considerations to the fore.
Ultimately, Section 56 of the Renters Rights Act represents a legislative shift towards a more paternalistic approach to regulation of the rental market. Whether this heralds the beginning of a sea change leading to more rigorous scrutinization of tenant selection remains to be seen.
Nevertheless by removing the objective economic metric, the legislation creates a potential vacuum likely to be filled by subjective, and potentially discriminatory, decision-making. Robust tenant protection requires transparency, and section 56 risks driving the criteria for securing a tenancy into the shadows.