The little-known rule that means you could be paying more in rent than you need to

Landlords are pricing their properties at above market rate due to new laws brought in earlier this year – meaning tenants who offer at the asking price may end up paying more than they need to. Since May landlords and letting agents in England are banned from accepting rent offers above the advertised price, under the Renters’ Rights Act. And industry insiders say that some are choosing to advertise at “absolute ceiling” prices as a result. Shorts This is because they can still accept bids below the listed price if their asking price proves too optimistic, but if they list for too low then they may end up receiving less money than they could have. Rental campaigners say it may be worth renters enquiring about properties that are out of their budget in some cases – in case the landlord would actually accept a lower offer. Why landlords can’t accept higher than asking prices Section 56 of the Renters’ Rights Act 2025 prohibits landlords and letting agents from soliciting, encouraging, or accepting rent above the advertised asking rent. Before May, a landlord could list a property for a fixed price, and tenants could offer more than this to try and beat other potential rival renters. They could also list a property as being open to offers above a certain figure, which is no longer allowed. The old policy meant there was less of a risk if a landlord under-priced a home, as if they did, they could end up with lots of interest in the listing, and the potential for bids higher than the asking price. Landlords listing at ‘absolute-ceiling’ prices Industry insiders say that the new rules have forced a change in the way properties are priced, with listed prices often being the absolute upper limit of what a landlord expects to receive, rather than a reasonable estimate of market rate. Iain Thompson, director at Evolve Finance, which acts as a lending brokerage for buy-to-let owners, said that the ban on overpricing had prompted an immediate “defensive reaction” from landlords. “Landlords can no longer let a highly competitive market dictate the true market rate through natural bidding wars. As a broker, we see landlords adjusting to this by listing properties at highly optimistic, absolute-ceiling rental prices right from day one,” he explained. Patrick Bullick, former chairman of the National Association of Estate Agents London region and managing director of estate agent Stanley Property, said this was something he was seeing too. He said: “All agents are asking higher rents when stock comes available and seeing if the tenants will pay the figure. If not, they then reduce the asking price until someone does offer. “It has to be that way because if the price is too low and tenants try to bid higher an agent cannot accept a higher rent.” Chris Norris, chief policy officer at the National Residential Landlords Association, said: “With the Renters’ Rights Act now in force, it is reasonable to expect landlords to approach pricing with more discipline than before. “Where they once had room to be flexible, they now need to calculate their costs in full and settle on a firm asking rent from the outset, one that reflects their risks and the rising cost of maintaining a property while still leaving a fair return.” What should renters do? Though renters will not always be able to get a discount on all property asking prices, experts say that they should be aware of the new rules, and not always assume they have to pay the listed cost. Generation Rent deputy chief executive, Dan Wilson Craw, said the new system would make the process of finding a rental home “less stressful” but would require “some getting used to” as some landlords may list properties for more than they think they will receive, then accept lower offers. “There’s no harm in calling the letting agent about a property that is slightly out of your budget and asking if they’d accept a rent you could afford, before going to view it,” he said. He also said that it was worth checking if properties had been listed for a long period of time before deciding what to offer as well. “Older listings are more likely to come down in price,” he said. Richard Donnell, executive director at Zoopla, said tenants should be aware that rent price inflation was at its lowest level in four years, and there would be limits to how much landlords could ask for their properties. “Landlords are rent takers not rent setters,” he said. “With migration [into the UK] likely to be below 200,000 a year and weaker student demand, the demand side is cooling,” he added.