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Sellers moving into rentals to break property chains: Rightmove

A growing number of home sellers appear to be moving into short-term rentals in order to put themselves in a stronger position as chain-free buyers.

Figures from Rightmove show that the proportion of properties listed as “chain-free” on the site has increased from 15 per cent a year ago to 21 per cent now.

 In February the number of buyers searching for properties with “no chain” in Rightmove’s keyword sort tool was 72 per cent higher than in February 2020 in the rush to cash in on the stamp duty holiday before March 30 when it had been originally set to finish.

The trend is most defined in London where the percentage of chain-free homes has jumped from 12 per cent this time last year to 21 per cent now. 

Rightmove points to corresponding strong growth in rental demand of over 40 per cent in the neighbouring regions of the South East and South West as some people choose to sell up and rent outside of the capital.

There are also some landlords selling up in the capital due to falling rents.

Some may be trying to take advantage of the stamp duty holiday to improve their chances of getting a good price

Rightmove director of property data Tim Bannister says: “We know that one of the reasons sellers are often hesitant to come to market is because they can’t find somewhere that they want to buy, but with record buyer demand and the stamp duty holiday being an added incentive for prospective buyers there seems to be a group of people who are choosing to sell up now and rent temporarily.

“The flexibility of renting gives people the chance to ‘try before you buy’ in a new area and so those who have chosen to move to the countryside may be selling their house chain-free to then rent and take time to decide if the good life is definitely for them.

“Selling chain-free is perhaps something some owners hadn’t considered as a possibility before now, but with the competitive market and stock shortage we currently have they’re trying to put themselves in a more attractive position when their dream home comes along. 

“In the capital there are also some landlords who are selling up now, which could open up an opportunity for some first-time buyers looking for their first home.”

Chestertons chief executive Guy Gittins says: “Over the past year there has certainly been a marked increase in the number of people that are selling without an onward purchase through our London offices. 

“One of the most common reasons is that the family house market is incredibly competitive in London and many sellers are willing to break the chain in order to become chain-free buyers and place themselves in the best position to secure a property when the right one comes up. 

“With many people now working from home, these sorts of buyers have more flexibility in where they live in the short-term, and many are choosing to move back with family temporarily, or even moving further out of London for the short-term.

“There are a number of other reasons as well, including a number of landlords selling their buy-to-let investments due to falling rents, second home owners deciding to cash in on some of the additional value that has built up in their property, and sellers making their property more attractive to buyers who want to meet the stamp duty holiday deadline.”

Strutt & Parker’s senior associate director in Exeter Oliver Custance Baker adds: “This is definitely something that we’ve seen particularly as current stock levels aren’t quite meeting levels of buyer demand. 

“In the Tiverton area we have numerous buyers who are sitting in rented accommodation, not only so they can try out the area and the lifestyle on offer, but to make sure that they’re first in the door when something that ticks their required boxes comes onto the market.”

Original Article from Mortgage Strategy 26/03/2021

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