A SHORTAGE of rental properties has led to potential tenants having to bid on places, with some having to offer landlords six months’ rent in advance to secure a place to live. Youth homelessness charity STEP BY STEP warns rental bidding is putting younger applicants at a disadvantage, effectively pricing young people out of the rental market.
In recent years, the government has introduced a raft of legislation to put more responsibility and onus on landlords.
While this is welcome news for renters, it has led to many landlords pulling out of the buy-to-let market.
This exodus has been exacerbated by the recent challenges of Covid, as well as booming house prices that make selling up more attractive than ever.
A shortage of rental properties means there is fierce competition for the few places available, and many landlords are taking advantage of this by inviting bids to rent their properties.
In some cases, potential tenants are asked to complete a form explaining to the landlord why they should be given the place over rival applicants.
Step by Step support hundreds of young people facing homelessness each year and are concerned these bidding wars are yet another hurdle to be overcome.
Sarah Muckart, senior placement co-ordinator at Step by Step, said: “As the need to bid for a property becomes more commonplace, the likelihood of a young person securing their own property declines.
“Young people who have faced challenging upbringings and experienced homelessness will be at an immediate disadvantage.”
Traditionally, landlords have let a property on a first-come, first-served basis. As long as a potential tenant can pay the deposit and passes reference and credit checks, the place is theirs.
This meant a young person was in the same running as everyone else.
However, there is nothing in law to say landlords have to adhere to this principle, and in practice they are free to use their own criteria when choosing a tenant.
This has led to landlords asking potential tenants to write an application, explaining who they are, their background, and the amount they are willing to bid.
Landlords then make their decision based on who can pay more or who looks better on paper.
Applicants are often gazumped by those offering to pay up to 25 per cent more rent, and in some cases paying six months’ rent upfront.
Very few young people can compete with that.
Step by Step believes the situation can be remedied by a change in the law.
“We must push for rental bidding to be banned in the UK, as is the case in New Zealand,” says supported lodgings manager Kelly Headen.
“We need to acknowledge the increased demand and the reduced supply in rental properties post-Covid and put in effective regulated measures to enable access to all.”
The recent change in New Zealand’s tenancy laws means rental properties cannot be advertised without a rental price listed, and landlords cannot invite or encourage tenants to bid on the rental.
A similar change in UK tenancy law would level the playing field for young people struggling to find a place to live.
As things stand, the ability for landlords to invoke a bidding process on rental properties prices young people out of the market and leaves them open to discriminatory practices.
For the young people supported by youth homelessness charities such as Step by Step, it is yet another barrier to moving on to independent living.
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