Letting agents. You have to feel a bit sorry for them, don’t you? Usually very charming, but there is no question they are the poor relation to the sales team. Just think about the levels of commission they stand to win on a deal, compared with those big boys in senior school (sales).

Now, however, the junior-school lads are quivering with excitement — in central London, at least. A rush on properties, a dearth of rental stock and a boom in prospective tenants have all meant the advent of sealed bids for lets.

“It started towards the end of last summer,” says Kari Trajer, letting manager at Hurford Salvi Carr in Clerkenwell. “And it was new to us.”

Clearly, the bidding scheme relies wholly on more than one tenant wanting to rent the same flat. Trajer arranges a limited window of opportunity for viewings and invites would-be tenants to name their price. “We had a one-bedroom flat in Dickens Court, Clerkenwell,” she says. “We asked for £395 per week, which we felt was optimistic. There were three viewings and, after it went to sealed bids, the best person won.”

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Or, in other words, the one prepared to pay the most money — although Trajer insists there were other elements that clinched the deal. “Two tenants both offered £415 per week,” she says. “One was an individual tenant, the other a corporate relocation agency. The individual offered a cash deposit, the corporate agency a letter of guarantee. So the landlord plumped for the individual.” Quite right too.

Trajer admits that the sealed-bid phenomenon is entirely about market forces. “There is such a shortage of stock,” she says. “People have stopped selling. So tenants who previously would have exited the rental market now can’t.”

Yet, intriguingly, it’s not always the top price that wins the day, she says. “There are four or five other elements that will attract a landlord. Indicating that you will stay on for at least a year, with no option to break the contract after six months, is one. And tenants who can pay six months’ rent up front are very attractive.

“Couples are preferred over sharers, and individuals over companies. And flexibility is important. If you indicate that you will pay a good rent, and are relaxed enough to put up with the landlord’s furniture, you might win.”

Andy Whelan, who has a one-bedroom flat without parking in Clerkenwell, worth about £350,000, is one of the landlords who has benefited from Trajer’s sealed-bid system. “I was looking for a new tenant who could pay about £340 per week,” he says. “The flat was put on show for just one hour on a specific morning. We agreed that we would accept offers over £360 per week.”

Ten people came round to see it. By 11.30 that morning, Whelan had offers in two envelopes: £386 from an individual tenant and £387 from a company wishing to use the flat for a variety of tenants over the year. “I chose the individual because having one tenant would be better than letting it out to someone who would sublet it to a variety of tenants,” he says. “I’m perfectly happy.”

“I just hope it catches on,” says Matthew Jones, a multiple landlord with about 10 properties on the outskirts of southwest London. “I would like to think the market was that busy. I don’t think we would quite reach that level of interest here in Richmond. We are meeting ambitious demands, however. I’ve just let a five-bedroom, three-bathroom house for £3,800 per month, which is a good price. It’s much busier than it was last year.”

As far as Jones is concerned, almost as important as the willingness to pay top rents is an ability to move fast. “It makes a huge difference. The tenant who got the five-bedroom house did so not just because of paying well, but because of being able to move in a week earlier than anyone else. This saved us almost £1,000 on the mortgage.

“One of the first questions we ask is, ‘When can people move in?’ If they can move in fast, they are more than welcome to a discount.”

So far, sealed bids seem to be confined to central London. Trajer’s colleague Mason Brooks, in the agency’s Canary Wharf office, has done only a handful. “I had a top-floor flat at Canary Riverside with a panoramic view,” he says. “We were asking £1,500 per week. It went to sealed bids, with someone from Deutsche Bank bidding against someone from Lehman Brothers. In the end, it went to the one who offered £1,700 per week.”

Was the landlord happy? “He nearly dropped the phone when I told him.”

Nor does the practice appear to have made it out of the capital. “I know of some areas with mega demand, but never this sealed-bid stuff,” says Ajay Ahuja, author of the guide Beating the Property Clock, who has a £13m portfolio in cities such as Glasgow, Hull and Aberdeen. “Frankly, the reason they are going for sealed bids is that landlords aren’t aware of what they should be charging. I would advise landlords to hike up the rents in the first place, rather than go for some sealed-bid situation.”

Oh, yes — but the notion of a big, fat number in a sealed envelope is so delicious, it makes me feel like investing in Clerkenwell tomorrow. Just to get the kicks.

buytolet@sunday-times.co.uk

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