One in 10 rental tenancies ‘going to former home-owners who have sold up’

One in 10 (10%) new rental tenancies this year was taken out by former home-owners who have sold up, according to research.

Growing numbers of sellers are looking to rent as a stop-gap amid a lack of choice of properties available to purchase, estate agent Hamptons said.

Some people making lifestyle changes by moving to unfamiliar locations are also “trying before they buy”.

Typically, these tenancies are short term – either rolling contracts or six-month deals.

Sellers in Scotland, Wales and the North West are most likely to rent following the sale of their home.

In these locations, 16.4%, 15.3% and 11.8% respectively of new tenancies taken out so far this year were to someone who had sold their home.

With fewer properties on the market available to buy, sellers struggling to find somewhere to buy have increasingly turned to the rental market, Hamptons said.

Having nowhere to sell may also put some previous home-owners in a stronger position to pounce when they find the right property to purchase.

The 10% share of new tenancies being taken out by someone selling their home is the highest proportion since 2016, Hamptons added.

It said the numbers increased as the phasing-out of the stamp duty holiday approached, but have remained high.

In July there were 43% fewer homes available to rent than at the same time last year, a fall that has accelerated significantly over the last four months.

Aneisha Beveridge, head of research at Hamptons, said: “With many sellers facing pressure from their buyer to move as they struggle to find their next home, rising numbers of home-owners are breaking their chain and renting instead.

“While moving into a rented home to beat the end of a stamp duty holiday is not new, it is increasingly being used as a stop-gap by house-hunters faced with a lack of stock to buy.

“Renting before buying has also been driven by house-hunters making more long-distance moves.

“With growing numbers looking to live in areas they know less well, many more are trying before they buy. While moving into a rented home to get to know an area often isn’t people’s preferred option, it’s nearly always more cost-effective than buying the wrong house in the wrong street.

“But while buyers face a lack of stock in the sales market, tenants are suffering from less choice in the rental market too.”

Here are the percentages of homes being let following a house sale, according to Hamptons:

– Scotland, 16.4%

– Wales, 15.3%

– North West, 11.8%

– London, 11.6%

– East Midlands, 9.5%

– South East, 9.4%

– Yorkshire and the Humber, 9.0%

– North East, 8.8%

– South West, 8.8%

– West Midlands, 8.6%

– Eastern England, 7.9%