Connells-owned Hamptons says it’s calculated that no fewer the 117,500 sellers this year have chosen to rent before buying their next home.
The agency says that to speed up sales in the frenzied housing market so far in 2021, growing numbers of sellers have rented as a stop-gap.
Typically, these tenancies were short-term, either rolling contracts or six-month deals.
Sellers in Scotland, Wales and the North West, three of the country’s most competitive housing markets, have been most likely to rent following the sale of their home. In those locations 16.4, 15.3 and 11.8 per cent of new tenancies respectively taken out so far this year were to someone who had just sold their home.
Hamptons research chief Aneisha Beveridge says: “With many sellers facing pressure from their buyer to move as they struggle to find their next home, rising numbers of homeowners 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. And this lack of stock is underpinning rental growth, which remains well above normal levels, with few signs it’s likely to significantly slow over the coming months. This lack of stock is also likely to suppress activity, meaning fewer homes could be let in 2021 than in 2020, despite last year’s lockdown.”