Bidding Wars Get Weird in One of World’s Hottest Rental Markets
London applicants try flirting, flowers and boasts about 5K-race times—it’s ‘a dance’
London applicants try flirting, flowers and boasts about 5K-race times—it’s ‘a dance’
LONDON—Lola Agabalogun recently responded to an ad for an apartment only to find 100 other renters had called about the same flat in Hackney, one of the city’s trendiest neighborhoods.
So the 27-year-old ex-New Yorker did what a growing number of other desperate tenants are doing in London these days, and what some landlords are even requiring. She pulled out her laptop and wrote what she described as a love letter to the anonymous landlord, describing how wonderful the flat and neighborhood were. She even mentioned personal details like her love for tennis.
No matter. She was outbid to the tune of £400, or about $520, a month.
In New York, “You show up and if you have the right documentation you get the place,” she said. “Here, there is more of a dance.”
London rentals have been tight since a pandemic surge in home sales took thousands of rental flats out of the city’s already tight supply. Then, hordes of workers and students returned to the city. Average rent has soared 49% from the April 2021 pandemic low, according to real estate agency Knight Frank, the second-sharpest growth of any major global city after New York.
“When the phone started blowing up I actually considered pulling the plug out of the line,” real-estate agent James Dainton said of one particularly hectic period last summer. “I said to the team, ‘How do we actually deal with 70 to 80 applicants?’ We try to be as fair as we can, but at the same time when you’ve got that many inquiries, you’ve got to be a little bit cutthroat.”
That means raising tenant requirements—including paying multiple months of rent in advance, having family members or friends cosign the lease and even requiring that tenants tell the landlord a bit about themselves.
Personal statements, long used by real estate buyers to pull on sellers’ heartstrings to win a coveted property, are now part of London’s rental world, used by landlords to discern whether tenants are a good fit, agents said.
Potential tenants discuss their hobbies, weekend activities, alma maters and other interests, Dainton said. One recent client, an American expat, boasted about his athletic prowess. “He told me he can run a 5K in 15 minutes,” Dainton said. “I was gobsmacked—I can’t get lower than 24 minutes.”
The runner didn’t get the flat.
Carman Leung, a 26-year-old recruiter from Sydney, distributed a PDF file to agents that included career highlights, hobbies such as aerial hoop—in which she strikes acrobatic movements from a metal ring suspended in the air—and her ability to speak Spanish and Cantonese. After multiple attempts she found a place, for a rent that was 25% over her budget. She said she wasn’t sure if it was her willingness to pay the price or her note that finally persuaded the landlord.
Bidding wars are still common, with the person willing to pay the most or take a long-term lease often winning the flat. But some landlords are willing to accept lower rent in exchange for intangible qualities, agents said.
“It’s like an audition,” said Oliver Cruikshank, director at Keatons, a lettings agency based in East London. “Personality can come into it. If the landlord feels they connect with the tenant they may decide on that, as these two parties are potentially stuck with each other for a long time.”
He said sometimes “people who usually don’t get no for an answer” are rejected. “People come to us who are earning a quarter of a million a year, and we’re saying we cannot accept their offer,” he said.
Greg Tsuman, director of the real estate agency Martyn Gerrard, said one client recently showed up to an open house with chocolates and flowers for the landlord. “So, a bribe,” he said half-jokingly.
Tsuman said landlords themselves are being squeezed. A tax-law change and rising interest rates on mortgages have pushed up landlords’ bills in recent years. Many are raising prices out of necessity, he said.
Tenants and advocacy groups said requiring personal details violates their privacy and increases the risk of discrimination.
“It was when my friends and I began composing a simpering personal statement just to rent a flat that it finally clicked for me: Britain’s rental market is broken,” a Sunday Times columnist wrote this spring.
Tom Darling, campaign manager of the advocacy group Renters’ Reform Coalition, said the housing crunch has turned London’s property market into the “Wild West.”
Darling recently toured a dozen rental flats. Landlord agents asked for everything from a biographical essay to a photo. “The estate agent said it was to form a connection with prospective tenants—which is just a recipe for discrimination,” Darling said.
He liked a place, and he debated whether to include in his essay that he had attended Oxford, worrying he might come off as elitist. He included the detail, and mentioned he was in a stable relationship, clean, tidy and career-oriented.
“It’s slightly degrading, that process of having to sell yourself to find somewhere to live, and you’re trying to think about the ways in which to write your own history,” he said. “The more you put into each application the more liable you are to feel personally about it.”
In the end, he was outbid on the place.
Letting agents are also being schmoozed. Freelance writer and Miami native Grazie Sophia Christie moved to London from Boston five years ago and recently searched for a new apartment. She sought old-world charm, but one flat she saw looked more like a frat house.
“The bedrooms were old and musty,” she said. “Things needed to be repainted. There were stains and broken tiles in the kitchen.”
When she asked the landlord if he would make the repairs, he scoffed. “He said that he already had an offer,” she said.
For subsequent flats, she tried a different tactic: implying she was wealthy and flirting with agents.
“You have to incentivize them to send you a flat before it comes online” and get the letting agent to tell the landlord you are a great future tenant, she said. “You just have to be really friendly and chatter.”
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Excluding the Covid-19 pandemic period, annual growth was the lowest since 1992
Australia’s commodity-rich economy recorded its weakest growth momentum since the early 1990s in the second quarter, as consumers and businesses continued to feel the impact of high interest rates, with little expectation of a reprieve from the Reserve Bank of Australia in the near term.
The economy grew 0.2% in the second quarter from the first, with annual growth running at 1.0%, the Australian Bureau of Statistics said Wednesday. The results were in line with market expectations.
It was the 11th consecutive quarter of growth, although the economy slowed sharply over the year to June 30, the ABS said.
Excluding the Covid-19 pandemic period, annual growth was the lowest since 1992, the year that included a gradual recovery from a recession in 1991.
The economy remained in a deep per capita recession, with gross domestic product per capita falling 0.4% from the previous quarter, a sixth consecutive quarterly fall, the ABS said.
A big area of weakness in the economy was household spending, which fell 0.2% from the first quarter, detracting 0.1 percentage point from GDP growth.
On a yearly basis, consumption growth came in at just 0.5% in the second quarter, well below the 1.1% figure the RBA had expected, and was broad-based.
The soft growth report comes as the RBA continues to warn that inflation remains stubbornly high, ruling out near-term interest-rate cuts.
RBA Gov. Michele Bullock said last month that near-term rate cuts aren’t being considered.
Money markets have priced in a cut at the end of this year, while most economists expect that the RBA will stand pat until early 2025.
Treasurer Jim Chalmers has warned this week that high interest rates are “smashing the economy.”
Still, with income tax cuts delivered at the start of July, there are some expectations that consumers will be in a better position to spend in the third quarter, reviving the economy to some degree.
“Output has now grown at 0.2% for three consecutive quarters now. That leaves little doubt that the economy is growing well below potential,” said Abhijit Surya, economist at Capital Economics.
“But if activity does continue to disappoint, the RBA could well cut interest rates sooner,” Surya added.
Government spending rose 1.4% over the quarter, due in part to strength in social-benefits programs for health services, the ABS said.
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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.