A prominent figure in the lettings PropTech sector is warning that an unintended consequence of the Renters Rights Bill will be gazundering.

William Reeve, chief executive of Goodlord, writes on the agents’ industry website The Negotiator that the Bill’s ban on bidding war will – quite naturally – mean landlords will start of ‘overprice’ their lets – that is, they will put properties on the market at a slightly higher price, on the assumption that tenants will then negotiate them down. 

Reeve says that so while renters will no longer have to go through potential bidding wars, they will instead have unreliable market data that will be hard to understand. 

He says many rental market trackers rely on advertised prices – these trackers in turn are used by landlords, agents and tenants to gauge appropriate rents. 

Reeves says: “So, if rental properties start being advertised with say a 10% price bump to hedge for gazundering, suddenly we’re all at sea. Tenants will be hit hard; unable to gauge what a ‘fair’ price for their region is. And agents will be under pressure to advise on exactly how high landlords should go.

“Also, landlords who try to resist the practice will lay themselves open to below market rental bids.”

He says this deterioration in the quality of market data will unsettle landlords, many of whom are already “teetering on the edge, eyeing up the ejector button.”

You can read his whole piece here: https://thenegotiator.co.uk/news/regulation-law-news/rental-market-landlords-gazundering-reforms/