Experts warn this could undermine efforts to prevent bidding wars contributing to ever-increasing rental prices.

Sir Keir Starmer said he would introduce legislation preventing landlords from instigating bidding wars among prospective tenants. “We’ve got to stop the bidding wars,” he stated during a visit to a housing site.

Shadow health secretary Wes Streeting added that Labour would require landlords to advertise rental prices clearly, ensuring the advertised price matches the charged rent.

However, a senior Labour official clarified on Friday that it “would be allowed” for renters to choose to bid above the advertised price, as “that’s a voluntary thing”.

The official stressed that agencies cannot facilitate bidding wars to drive up rents on landlords’ behalf.

The proposals are loosely based on New Zealand’s 2021 policies – barring landlord from encouraging bidding, but permitting renters to offer higher prices voluntarily.

Experts have labelled this a “loophole”, noting that average rents in New Zealand have grown at a faster rate since implementing the policy.

Lucian Cook, head of residential research at Savills, told the Financial Times that the competitive bidding environment is inevitable given the shortage of private sector housing stock, adding “whether or not it is encouraged or invited strikes me as being sort of not the point”.