Research reveals 20% of tenants battling ‘bidding wars’ for homes

Almost one-in-five renters have lost out on a property due to a bidding war in the past two years with tenants in London, Brighton, Southampton and Manchester fairing worse than most, research from Cornerstone Tax reveals.

As demand continues to outstrip supply in the rental market figures from the group of stamp duty experts show that on a national level an average of 17% of renters are having to endure other competitive tenants moving against them.

BIDDING WAR

In Southampton a whopping 28% of renters are forced into a bidding war followed by 27% in Brighton, 26% in London and 20% in Manchester.

But David Hannah, Cornerstone Tax Chairman, reckons that the flurry of legislative attention surrounding the rental market, including the proposed abolition of no-fault evictions, is providing a positive step in the right direction.

He says: “Our data highlights a clear issue in the UK’s rental market, many of these landlords took out mortgages on buy-to-let schemes during a period of sustained low interest rates; fast forward to 2024 and the pressure currently facing landlords is simply too much.

“Spiralling interest rates and the highest tax burden since the second world war have forced thousands of landlords to sell up, which then puts further pressure on renters due to a lack of stock.”

UNFORTUNATE

He adds: “It’s unfortunate that many renters from across the country now feel the need to jump through multiple, previously unnecessary hoops to secure a rental property – the Government’s proposed Renters (Reform) Bill would undoubtedly relieve the stress of many tenants, but I’d argue that policymakers ought to be assessing the root causes of the current rental market turmoil.

“Whilst it’s positive to see many of the UK’s major mortgage lenders slashing their rates, with the effective rate of interest falling to 4.9%, the dream of home ownership remains a pipe dream for many. What’s needed going into 2024 is a commitment from the Bank of England to prioritise first-time buyers by signalling further cuts to the interest rate.”