Stop Gap Renting: How is it affecting the rental industry?

What is ‘stop gap renting’? 

There are multiple reasons why renting is better than buying, but ‘stop gap renting’ in particular saves buyers from buying the wrong home. An increasing number of people are renting for short periods of time as a ‘stop gap’ for multiple reasons:

Rent Guarantee Insurance for £299

  • ✓ Covered for £2,500 per month
  • ✓ Claim up to £25,000
  • ✓ Free access to legal advice
Buy now
Rent Guarantee Insurance
  • They have just sold their house and have yet to find a new one
  • They want to be chain free when it comes to buying a new house
  • They are testing out a new area before committing to a purchase

While ‘stop gap’ renters tend to be home-buyers who are between properties, this could also increasingly include renters, who may choose a property that is not quite what they are looking for or not in the area they wanted as a base for finding something else. 

What is causing the rise in stop gap renting?

Thanks to the stamp duty holiday, which ran from July 2020 to 30th June 2021, the housing market went wild. Anyone who had been considering buying a new property took the plunge; anyone who had been planning to purchase in the next couple years brought their plans forward, to avoid the burden of stamp duty.

This created an overwhelming demand on the market:

  • Sellers were securing record prices for their properties
  • Demand massively outstripped supply, leaving sellers without a home to move onto
  • The supply shortage saw 27% fewer homes to buy in July 2021 than July 2020 (according to estate agent Hamptons)
  • The number of tenancies signed by home sellers hit a 5 year high in 2021

Now that stamp duty is back in place, the frenzy has died down, but this doesn’t mean it’s any easier to find a home, so hasn’t eased the need for stop gap renting. Without the stamp duty holiday, there is no longer any incentive to put your house on the market, so people who are planning to sell in the near future aren’t tempted to do so any sooner.

This means that anyone who sold up during the stamp duty holiday, and is still searching for their next home, is likely still in rented accommodation while they continue their house hunt.

What are the benefits of stop gap renting?

As with all things, there are pros and cons for stop gap renting, for both landlords and tenants:

The Pros



More tenants in the market, so easier to find new tenants

Can try out a new area, before committing to a purchase there

Competitive rents

Buys time to find the right property in the right location

The cons :

The Cons



Higher tenant turnover and more risk of void periods

Supply shortage in rental properties

Potentially need to find new tenants at short notice

Higher rents

The main issue with stop gap renting is the pressure it adds to an already overwhelmed market. Many renters are already struggling to find homes in the right area that they can afford as the supply is so low at the moment. 

What does this mean for the rental market?

Times are hard across the board in the rental industry for a number of reasons:

  • Rising rents. The surge back into cities after the pandemic, as the work from home orders lifted, saw huge competition for properties, driving prices up
  • Low supply. Landlords are increasingly hit by tax and regulations and are choosing to sell up or move to short-term rentals instead

Adding home-owners who are between homes to the already huge pool of rental house hunters just increases the competition for properties. While this gives landlords more potential tenants to choose from, these are not ideal tenants and can lead to a higher tenant turnover, as stop gap renters aren’t planning to settle down in your property, they’re just using it as a base while they find and purchase their next home. Ideally, you’d find a great, reliable tenant who’d stay for years, but a stop gap renter is looking to move on as soon as possible.

Stop Gap Renting

However, stop gap renters need a roof over their heads, just as much as a longer term tenant does, so how can landlords work best with these particular renters?

  • Understand their plans. If your potential tenants let you know they’re just looking for somewhere to live while they look for their next home, don’t let this put you off! Don’t forget how long your own buying process took. The purchase process can take several months, as can finding the right place. So while they may be using your property as a ‘stop gap’, they could still be with you for a little while
  • Consider the contract. Make sure that both you and your potential tenants are happy with the contract. It may be that a monthly rolling contract will suit everyone best, or you might all be happier with a break clause. Knowing up front that these aren’t going to be long-term tenants means you can make an agreement that is agreeable to both parties
  • Cover yourself. We always recommend Rent Guarantee Insurance and in this instance, when you know that your tenant has a lot of expenses coming up (house buying is certainly not cheap!), make sure you have RGI, so you are not relying on your tenant’s ability to budget for rent and expenses only. It’s likely to be totally fine – but why take the risk?

A stop gap renter shouldn’t put you off, after all, the most important thing is to ensure that you have a reliable tenant and avoid void periods. Make sure that you keep the lines of communication open with your tenant, so that you are aware of their plans and progress, so you aren’t surprised when they give notice and have plenty of time to find a new tenant!

Comments 0


Tenancy deposit
Money shield
Local heroes
Approved code
Property ombudsman
Open banking
Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, or by contacting the FCA on 0800 111 6768

Mashroom Mortgages is a trading name of Emash Ltd which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it. A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £495.
Emash Ltd. Registered Office: 21 Navigation Business Village Navigation Way, Ashton-On-Ribble, Preston, Lancashire, England, PR2 2YP. Registered in England Number: 11735831.