Once on the property ladder, few people fall off it, but Paul Clarke has found himself renting for the first time since university at the age of 38 with a family in tow.
“It was tough to find a rental. It was a shock to us. We were turned down for five or six houses because we have a dog and two children,” he says.
Clarke, who runs the boutique estate agency Mr and Mrs Clarke, sold his bucolic farmhouse in the tiny hamlet of Mousley End in the Warwickshire countryside because he wanted to take up an asking price offer.
The trouble was, Clarke hadn’t bought anything himself. He’s not the only seller who has found themselves unexpectedly homeless recently. These former homeowners want to take advantage of buyers knocking down their door for more space, greenery and a life in the countryside, a desire fuelled by months locked up in cramped city quarters and incentivised by the temporary stamp duty holiday.
Yet there’s nothing for them to buy. In almost a fifth of the postcode districts in the UK, there is less than two months’ worth of homes left to buy at current rates of sale, according to the property data analyst TwentyCi. Rather than buy something he didn’t want, Clarke chose to embrace his new nomadic existence and rent a townhouse in the centre of Warwick to enjoy a taste of city life again (and the odd takeaway).
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“To pick where you’re going to move to in two months is quite restrictive,” Clarke says. “We sold two properties in chains before this and we said we’d never get involved in one again. You have no control and we wanted our sale to be a nice experience. We wanted to be the ones breaking the chain.”
The rush to rent may have started out as an attempt to keep a roof over their heads, but once these halfway-homeless movers are in situ, they find they aren’t desperate to climb back on to the ladder. Being chain-free puts them in a strong position to pounce on a property once more sellers have been vaccinated and feel confident enough to put their homes on the market.
Robin Gould, director at the buying agency Prime Purchase, says he has never seen such a shortage of stock in his 35 years in the business.
“I think the real reason why sellers are reluctant is nothing more complex than not being able to find anything for themselves to move to. Lack of choice and the thought of having a buyer pushing them into rented accommodation is not an appetising prospect for any seller, especially when you have the choice of delaying until things look better,” he says.
When vendors do find somewhere else to move to, the market is so frenzied that in some cases their seller has demanded more money or broken off the deal to accept a higher offer from another buyer (commonly called gazumping).
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This has happened to one in ten people, according to the HomeOwners Alliance, and visits to its advice page on gazumping increased by 39 per cent last month. A survey by the online estate agency Emoov found that one in three property deals fall through every year.
“Sellers have become more confident in this market. They’ve heard on the grapevine or at a virtual dinner party that so-and-so has had five buyers and got so much. For the best-in-class properties we’re saying to buyers, if you want it, you’ll have to pay a bit more than you did even a few months ago,” says Lindsay Cuthill, head of the country department at the estate agency Savills.
He would know, as competition for country houses is particularly fierce right now. Some househunters are renting in the countryside before they embrace the good life permanently. For others, renting between moves is the only way they will get their foot in the door.
“We had a house that was on for £1.35 million, and the agent said he has got 47 viewings lined up. I said, that’s ridiculous, you’ve got to insist that everyone who wants a viewing is proceedable [chain-free or has already sold their home subject to contract] and he said they are the proceedable ones,” Cuthill says.
“A friend of mine is renting near me in the Cotswolds and she said she was one of 11 people who viewed it. She wasn’t the highest bidder, but the landlord liked her references more — no children and no pets.”
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In the sought-after Surrey commuter belt, 50 to 60 per cent of prospective tenants are people who have sold their homes and are looking for a rental between moves, says Jamie-Leigh Harvey, head of lettings in Esher, Cobham and Weybridge at Knight Frank.
“We had 20 inquiries for one house and three quarters of the applicants had exchanged and couldn’t find anything to move to. This place wasn’t in great condition and it was basically vacant, but they needed a roof over their heads,” Harvey says.
Young couples and families are finding themselves trapped in big cities, largely because the rent there is currently cheaper than in the country or suburbs they are looking to move to. There’s a limited pool of family housing to rent in these places, and they are often unmodernised because the landlords that own them haven’t felt the need to invest in properties that traditionally have not commanded high rental yields.
Harvey says she got a 30 per cent rent increase for a landlord of a family home last week. “Those tenants sold two weeks previously. They were effectively homeless and needed somewhere quickly, so they took it,” she says.
Most of these new tenants seem to be signing up for 12-month leases with a six-month break clause, in case they find a property, but some are so concerned they won’t find anything that they are asking for an option to buy to be written into the tenancy agreement.
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“It means they get first refusal within the lease, so it can’t be sold underneath them. We’re averaging 4 to 6 per cent yields at the moment, which is very good, particularly on family homes,” Harvey says.
Tania Thomas, co-founder of a PR firm, is renting with her husband, Owain, and her daughters near her former (sold) home in Acton, west London. They turned down an offer in January in 2019 when there were plenty of properties on the market, then the housing market closed for seven weeks due to the pandemic. When it reopened, she found there was little to choose from.
“It was cheaper to rent here in London than in the Home Counties. There’s no rental stock in the country,” Thomas says. “We started looking to buy in September, and there hasn’t been anything or it has gone very quickly. So now we’re moving into a rental. It feels so weird that we both worked so hard to get on to the ladder in the first place and now we’re back to renting.”
Fritz von Runte, a DJ and producer based in Manchester, has had to put his 8,000-strong collection of books, records and films into storage because he can’t find anything well-priced to buy that doesn’t need serious work. He plans to rent in Airbnbs for the next six months before he makes his next move. “I’m very anxious about not having a home. This has never happened, but I can’t find a decent house for an affordable price,” he says.
