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Charlie Cochrane, 41, a British Airways pilot, never intended to be a landlord. So when he and his wife, Lesley, 41, a stewardess, put their four-bedroom house near Win-chester on the market last August for £695,000, they assumed they would sell quickly and move into a new home in the west Surrey town of Farnham, where their three children are already at school. Nearly a year later, however, and with £70,000 knocked off the price tag, their property has still not sold, and the Cochranes have reluctantly decided to let it out, accepting they may have to rent for a while in Farnham.

Richard Collins, who owns a recruitment business, didn’t expect to be a tenant again either - at least not at the age of 35 and as the owner of a seven-bedroom West Sussex farmhouse valued at £2.5m. However, he and his wife, Christianne, 34, want to move with their two children, Milo, 7, and Freya, 4, to the Surrey hills, but cannot afford to buy until they have sold their home in Kird-ford, near Petworth, which has been languishing on the market, at its valuation price, since April. With their son due to start school in Surrey in September, the pressure is on the Collinses to find somewhere to rent. “It’s not great having to go into rented accommodation,” says Richard. “It’s never your own home, and you can’t do the same to a rented house as you can to your own.”

Welcome to the new face of the British property market. Until the current slowdown, most people’s progression up the property ladder would have followed a standard – and straightforward – pattern. After renting for a while in their twenties, they would buy a first flat or small, two-bedroom house. Then, as children came along, they would begin progressively to trade up to larger and more expensive homes.

Few, other than a scattering of itinerant foreign diplomats, bankers and businessmen on temporary postings, thought of renting a family house – after all, weren’t we always told that was tantamount to pouring money down the drain? And, with the exception of those looking to build up a property portfolio, most people would sell rather than let out their family home when it was time to move on.

With prices falling and the market grinding to a halt, however, times are changing, and homeowners and buyers are having to adapt. Figures from the Nationwide released last week showed house prices went down by 0.9% in June – the eighth consecutive month of falls – while the number of mortgage approvals dropped by 64% over the year.

All of which means there are growing numbers of people in the same position as the Cochranes, who are turning into reluctant landlords – and others, such as the Collinses, who are becoming tentative tenants. Often people are doing both. Research from Abbey Mortgages shows 800,000 people are planning to sell up and rent in the hope the market will fall further and they can buy their next house at a bargain price.

To see evidence of the new trend, look in any estate agent’s window: increasing numbers of properties are advertised as either for sale or for rent – whichever comes first. At the end of last month, Hamptons International reported a 40% rise in rental stock levels in London, and a 26% increase in the country. At the same time, it has seen a 9% rise in the number of tenants looking to rent in London this year, and now has seven applicants for every new rental house on the market outside the capital – up from three per property last year.

“People are being forced into either cutting their price in order to sell or looking at the rental market,” says Tim Hyatt, head of lettings at the estate agency Knight Frank. “Most people are realising that letting out is going to be a long-term option, so they are experimenting – and if they can afford to keep running their property for the next few years, they are doing so.” In the meantime, the ranks of tenants are being swollen by those in the happy position of having sold at or near the top of the market.

So what does all this mean for the new breed of landlords and tenants – and how can they make the best of the situation in which they now find them-selves? “Having a rental property is a strong asset,” says Hyatt, “and if you offer the right product, it is a fairly straightforward and hassle-free process.” As the panel, right, shows, if you want to be a successful landlord, you must be prepared to treat your tenants as valued customers and look after them. You should also be realistic about how much you can charge for your property. Despite reports of rising rents, there are signs they have already hit their peak in London and the southeast in particular. And in Liverpool, Newcastle and other places where there is a surplus of new-build buy-to-let flats, they are falling.

“A lot more people will be looking at the rental option, and there is already a greater supply of family houses for rent,” says Lucian Cook, director of residential research at Savills estate agency. “Pushing for top dollar may appear an attractive option, but you don’t want to face the landlord’s worst nightmare: the prospect of killer voids. So be realistic.”

Also, be prepared to be a landlord for some time: with the gloom worsening, any expectation that the market will soon bounce back to last year’s levels looks increasingly like wishful thinking by overoptimistic homeowners. The forecaster Capital Economics expects prices to fall by 15% this year and to continue on down next year and in 2010.

“There is no indication that the freeze in the current market will end in the short term,” says Cook. “On top of the lack of mortgage finance, the general outlook for the economy is weakening and sentiment has followed, meaning it will take longer for a recovery to come around. You have to be prepared to ride things out.”

So what about tenants? Paying rent again in middle age can be a curious experience, but it has its advantages – especially if you have sold your own property and now have cash in the bank. “It makes you chain-free, deposit-rich and in a very strong buying position,” says Catherine Manning, country lettings director at Hamptons. “As and when you do decide you’re ready to step back on the ladder, you will probably be able to offer below the asking price because you have financing in place.”

A neat solution, of course, would be for people renting a property to like it so much they decide to buy. Unlikely? Not necessarily. It is certainly what Will and Kate Evans, from Earlsfield, southwest London, are hoping.

The couple, who want to start a new life in Gloucestershire, put their three-bedroom house on the market for £645,000 in March, but despite reducing it to £575,000 in May, it didn’t budge. So they are letting it out for £1,950 a month to a professional couple instead.

“To have the hassle of being landlords is depressing,” says Kate, 29, who works as an image consultant, “but we just had to look at the bigger picture.The tenants are renting it with a view to buying it in a year. We really hope so, because then it means we’ll be able to buy.”

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