Landlords and agents need to care setting asking rents, following the ban on rental bidding wars – as pricing mistakes can prove costly, a regulation expert has warned.

Less flexibility

Zach Hayward-Jones (main picture) says the new rules leave less flexibility, adding: “Because your advertised rent must be final, your pricing strategy becomes even more crucial.

“In the past, landlords could use an initial asking rent to test demand and see what tenants were willing to pay, eventually landing on a monthly cost that worked on both sides.

“But now there’s less room for trial and error, which raises the risk of charging too much and putting potential tenants off – or undercharging and being locked into a below-market rate.”

Hayward-Jones told insurer Simply Business that those who pitch rents below local market levels could reduce their annual returns, while those who overprice properties risk longer void periods if applicants look elsewhere.

With margins tighter than ever, it’s important to take everything into consideration before setting your asking price.”

“With margins tighter than ever, it’s important to take everything into consideration before setting your asking price,” he says, which is why he argues that market research before listing is now “non-negotiable”.

That, he adds, involves comparing similar local properties and assessing factors such as condition, location and amenities before advertising a home.

Hayward-Jones advises that landlords and agents should focus on realistic local asking rents rather than attempting to build in a buffer against future costs.

“Make sure you land on a realistic amount before your advert goes live.”