Welcome back to Stentons Property blogs! This week, we're diving into the increasingly talked-about topic of bidding wars in the rental market!

There’s been a noticeable shift in the rental market lately – one that many tenants will breathe a sigh of relief over: bidding wars are starting to fade out. For the last couple of years, especially in high-demand urban areas, it’s been a landlord’s market. Tenants were competing fiercely, often having to offer over the asking price. But that tide seems to be turning, and it’s worth digging into why it’s happening, how it affects both sides of the rental relationship, and what we might expect going forward.

A Bit of Context

In the heat of the post-COVID bounce, demand far outstripped supply. Fewer landlords, more remote workers, a backlog of postponed moves, and inflation-driven hesitancy to buy all collided. The result? Tenants outbidding each other in desperation.

But now, that frenzy is cooling. We're seeing more properties with rents that are stabilising. Why? There are a few key reasons:

• Increased supply: More landlords are returning to long-term lets after dabbling in short-term or Airbnb-style renting, especially after regulatory pressure in some cities.

• Affordability limits: Wages haven’t kept pace with rent increases. Tenants are hitting their financial ceiling.

• Rising interest rates: While these have put pressure on landlords, they’ve also cooled the housing sales market, meaning fewer people are leaving the rental sector to buy.

• Regulatory changes: In some regions, the tightening of rental bidding rules (and enforcement of them) has taken the heat out of the market.

What This Means for Tenants

For renters, this change is mostly good news.

• More choice, less pressure: You’re no longer expected to make snap decisions or offer above the asking price just to be considered.

• Fairer pricing: With competition easing, asking prices are more in line with market value.

• Greater negotiating power: In some areas, we're even seeing landlords offer small incentives again – flexibility on move-in dates – something unheard of 18 months ago.

It’s not utopia, of course. Rents are still high in many areas, and quality stock can still go quickly. But there’s a sense that the market is recalibrating in favour of stability and fairness.

What This Means for Landlords

This shift does bring challenges – especially for landlords who’ve become used to bidding wars and rising yields.

• Longer void periods: Properties may not let within days, and landlords might have to be more patient or proactive with marketing.

• More emphasis on presentation and value: Tenants now have options, so well-maintained, reasonably priced properties will stand out. Substandard stock will struggle.

• Realistic expectations: The days of pushing rents up by 15% year-on-year may be behind us. Yield management will need to focus more on retention and steady income than speculative gains.

That said, it’s not all doom and gloom. A more balanced market often means longer tenancies, better tenant-landlord relationships, and less volatility – all things that ultimately benefit landlords who play the long game.

So, What Might the Future Look Like?

Here’s where it gets interesting. If this shift continues, we could be looking at a market that starts to resemble the one many European cities have long embraced: stable, tenant-friendly, and less speculative.

Some potential trends on the horizon:

• A rise in professional landlords and build-to-rent schemes: With the amateur buy-to-let model getting tougher, larger operators offering high-quality, well-managed rental stock may take more market share.

• More regulation: Governments are watching this space closely. Expect more rental reform, especially around standards, rent transparency, and security of tenure.

• Tenants becoming more selective: If people feel less pressure to “grab anything,” they’ll start demanding better service, energy efficiency, and clearer communication from landlords and agents alike.

Final Thoughts

The end of bidding wars isn’t the end of a strong rental market – it’s the start of a more sustainable one. And in the long run, that benefits everyone.

Until next time, happy house hunting!