Ten percent of all new tenancies or some 117,000 rentals agreed this year have been homeowners stranded by the difficult sales market, estate agency chain Hamptons has revealed.
Its figures reflect the current challenges within the sales market, where the recent post-Covid sales boom has led to a 27% drop in homes for sale in many parts of the UK.
The consequent growth in demand is contributing to a ‘squeeze in rental stock’ as former homeowners compete with longer-term tenants.
For example, 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.
Change of scenery
Hamptons also says the reasons why people are moving home within the PRS have changed dramatically in recent months; just 11.5% of tenants were moving to start a new job, while half were moving for a ‘change of scenery’ after the long months of Covid.
These different pressures on the rental market are having a predictable effect – higher rents.
Last month saw five of Great Britain’s 11 regions record their fastest ever rate of annual rental growth since the Hamptons Lettings Index began in 2014.
“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,” says Aneisha Beveridge (pictured), Head of Research at Hamptons.
“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.”