Renters asked to outbid each other for homes as housing crisis worsens

Renters across Scotland are being asked to outbid one another to secure a home, which campaigners say is driving up prices for tenants amidst a housing crisis.

Renters who viewed both city and rural properties told The Ferret, and tenant’s union, Living Rent, that letting agencies encouraged them to offer higher than advertised monthly rates or up to six months’ rent up front to increase their chances of a lease.

Living Rent claimed landlords and agents “are able to act with total impunity to the detriment of tenants”. It called for a “points-based system of rent controls,” with prices “tied to the quality of the home”.

Letting agents confirmed the practice, which they attributed to a rental stock shortage as landlords selling up in light of record property prices. One agent said rental bids were unheard of pre-Covid-19.

In June, Paul Virtue and his wife Ruth began looking for homes after being given notice on their rented Kirkcudbright property. But many landlords did not want to accommodate Virtue’s assistance dog or six children, even in four or five bedroom homes.

As the move out date approached, Virtue searched across Scotland, spending nearly £1,000 on diesel. Then, a pattern emerged.

“During the viewings they asked us to bid over the listed price for a better chance of securing the tenancy, which we did, but somebody must have bid more,” he claimed. This was the case, he said, in Dumfries and Galloway, Edinburgh, Glasgow and Dunbar.

Virtue specifically recalls bidding on rental homes let by Margaret Duffus Leasing in Stonehaven, Robertson Property Management in Errol, Perthshire, and by Aberdein Considine in Alford and Balmedie, Aberdeenshire.

He eventually found a property for the price advertised in Keith, Moray – nearly a 300-mile drive from Kirkcudbright. While happy to live in the region, Virtue remains frustrated at Scotland’s rental bidding war – a practice he is surprised is legal.

“We never thought anything more of it because of the pandemic,” he said. “Unfortunately, it seems to be common practice.”

‘Caught off guard’

Jay Purves accepted an Aberdeen flat in September advertised by Stonehouse Lettings for £350 a month. “They said, after implying that we were going to be given the place, ‘there’s someone else who has made an offer,” he claimed. “‘The landlord wants whoever makes the highest offer’.”

“Caught off guard” after already having given notice to his landlord, Purves offered £400, which he said was accepted without “even a conversation”.

“I don’t even know if these other people existed,” said Purves. “That’s bidding on one’s livelihood. It’s unacceptable.” Stonehouse did not respond to our request to comment.

Living Rent member Thomas, who did not give his surname, said he recently won an “auction” to rent an Edinburgh flat by just £1. But as he required a guarantor, his application was rejected. “The landlord already knew exactly the type of tenants he wanted, and used the auction to drive up the price,” he claimed.

When Jamie Wilson was struggling to find a Glasgow flat during August and September, he attended an open viewing advertised by Mitchells Sales and Lettings for £800. He said he was recommended to offer three or six months’ rent – £2,400 to £4,800 – in advance.

At another viewing, a Mitchells agent allegedly said the property had been accidentally advertised for £100 cheaper. But to stand a chance of getting a tenancy, Wilson would need to make an even higher offer.

With the viewing “rammed” with prospective tenants, there was “no doubt someone there would have offered something stupid for it,” Wilson said.

Rents ‘skyrocketing’, housing is ‘fundamental’

“Rent has been skyrocketing over the past decade” with many rents now “well over £900 a month in both Edinburgh and Glasgow,” said Living Rent’s secretary, Meg Bishop.

Scottish Government plans to tackle high costs are “a step in the right direction” but risk “leaving tenants to wait another five years,” she stressed. “As the Edinburgh Poverty Commission pointed out in 2020, housing is fundamental to fixing the poverty crisis across Scotland.”

A Mitchells spokesman said tenants bid voluntarily, but claimed landlords do not necessarily choose the highest bidder. In a recent letting with 13 applicants “seven offered above the rental amount asked – but the successful candidate was not one of them,” he said.

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An Aberdein Considine spokesperson said: “We do not advise potential tenants on any specific figure they should offer, however our local experts do provide information on a range of factors including local market conditions as well as the levels of interest.

“We believe it is vital that tenants are armed with the necessary information to enable them to make an informed decision.”

Margaret Duffus Leasing said it did not advise tenants how much to bid and cannot comment on individual situations. Robertson Property Management did not respond to our request to comment.

Priced Out is an investigation by The Ferret, co-published with The Herald, exploring the impact of – and reasons that lie behind – the cost of living crisis in Scotland.

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Photo Credit: iStock/Akarawut Lohacharoenvanich