House price falls creating reluctant landlords and reluctant tenants

By Peter Thompson. Published on June 19, 2008 This post currently has no comments.

Falling house prices and a stagnating property market are forcing home owners to let their property rather than sell it. This is creating a wave of new landlords who are also tenants.

It is becoming almost impossible to sell your property these days, particularly with bad news about house price falls hitting the news headlines on a daily basis.

House prices

People still have a need, or a desire, to move though so as their houses remain unsold on the property market, they are increasingly turning to letting and renting as a solution.

As many estate agents would acknowledge, these home owners would much rather sell than let their property, but they have no choice to let their property and then become tenants themselves.

This is creating a wave of home owners who are reluctantly becoming landlords and also reluctantly becoming tenants too.

You can see this in action on a property portal such as Rightmove.

For any given price band, or location, you will see a large number of properties that are being advertised both for sale and for rent.

It is no secret that they won’t be on the rental market for long. The rental market is booming, though potential tenants remain very price sensitive and will avoid properties with unrealistically high rents.

Having found a tenant for their property, the home owner then has to become a tenant themselves.

If unexpectedly becoming a landlord for the first time is unwelcome, then also becoming a tenant living in someone else’s property may prove unnerving too.

Try before you buy

There are benefits to becoming both a landlord and tenant, however. Those long drawn out legal processes required for the sale and purchase of property are avoided, as are the associated costs and stamp duty payments.

You can also engage in an emerging phenomenon of trying a property before you buy. As the owner of the house that you are renting probably wants to sell it whenever he can, you can live in it for a year or two and then buy it at a later date from the landlord, if you like it, when you sell your house.

There is a reasonably strong chance that you could live in the same property as a tenant, that you would have wanted to buy if only you sold your house.

So there are some benefits to the marked slow down in the property market. You can still move, if you accept the new challenges of becoming a landlord and a tenant, without the costs and hassles of selling and buying.

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