Tenants buying from landlords
Properties between tenants and landlords | Mortgage Advice in Nottingham
Buying from Landlords.
Tenants buying from landlords – Enquiries from tenants looking to buy the properties they rent from their landlords is increasing. Many landlords are offering their tenants “first refusal” to buy the home they are renting. Would your landlord offer you the same chance to buy your rented home? It is certainly worth approaching them and asking the question.
Why are so many Landlords selling their property to tenants?
The reason we have seen this increase is that the Government have cracked down on tax relief previously available on Buy to Lets and as some of those changes were “phased in” over a 4 year period it is only now that they are seeing the impact of these changes on their tax bills they consider selling their properties. Property has always been viewed as a sound investment and this is the same for the and as such many have decided to ride out the tax changes as they have looked at their properties as a long term investment. Should your Landlord be tempted to sell then they will understand the advantages of selling to you as the sitting tenant rather than put it on the market, namely:
- Avoiding Estate Agents Fees – the national average estate agents fee is 1.8% + vat so this alone saves a lot of money
- Loss of rent – it’s actually quite difficult to sell a house with a sitting tenant (tenants won’t typically put themselves out to do viewings on behalf of their Landlord) so the chances are they will move out and this creates a “rental void” where no income is being received. Selling to the tenant guarantees rent will keep coming in right up until completion
- No refurb costs – if the tenant moves out then the chances are the house will need at least a lick of paint if not more significant refurbishment to get it “ready for sale”
Tenants buying from landlords – Is this a good move? Consider the advantages
The advantages for the tenant buying the property they rent:
- You “know” the house well, you will probably understand and know the condition of the house and what, if any improvements may need doing
- No time delay, no moving in date.
- No “chain” so the sale is less likely to fall through
- You could save money on the asking price as the Landlord may offer you some discount from the open market sale because selling to the tenant will avoid the additional costs in an open market.