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Is now a good time to sell a house with sitting tenants? Tue, 22 Apr 2014 21:54

In a rising market, some landlords who have been suffering from negative equity, may consider that now is the optimum time to sell their property.

Other reasons landlords might decide to sell include tenants falling into arrears because of several welfare reform changes including: reductions in council tax benefit; the spare room subsidy; the £500 per week benefit cap and limits; and reductions on housing allowance. 

These problems are only likely to be exacerbated by the introduction of Universal Credit and there is already evidence that some LHA landlords are leaving the sector ahead of the changes.

So, on the face of it, a rising market is the ideal time to sell.

Just today, it was claimed that their are approx. 8 buyers for every property on the market and that "viewing open days" are becoming the norm.

The majority of these buyers are of course people who want to live in the property, not necessarily investors.


But while these headlines might sound enticing and sell newspapers and fuel dinner party conversations, the reality of selling a tenanted property is somewhat different.

If your tenant is on a fixed term assured shorthold tenancy that has remaining time to run, you will not be able to serve notice on them.  This means that you will not be able to offer the property with "vacant possession".

This was explained very clearly on Landlord Law's recent blog.

Excerpt:

There is nothing you can do, legally, to get the tenants to leave before the end of the fixed term if they do not want to go.

One way to think of it, is that you have already ‘sold’ the right to occupy the flat – to your tenants – for 12 months in exchange for the monthly rent.

So you cannot sell the right to occupy the flat again during the period of the tenancy –  as it is already sold. 


(You can of course issue a Section 21 notice at any time, but the tenancy would still have to run to the end of the fixed term.  You can serve a Section 8 notice (for arrears) at any time once the tenants are in more than 2 months arrears...).

Landlord Law suggest that one way to sell a tenanted property is to sell to another investor who will keep the tenants in situ.


This immediately limits your market, as investors are not as plentiful as first time buyers.

Furthermore, there is only a handful of BTL mortgage lenders who will lend on a tenanted property, so finance is restricted for this type of purchase.

Tenanted properties therefore mostly appeal to cash buyers like ourselves.

We appraise each opportunity on its own merits. However as a general guide we pay up to 85% of the Market Value.

This can be more, or slightly less dependant on a number of factors.

We are transparent and appreciate that a trade price will only work for a few, however we are confident that we provide an excellent service and have extensive experience in Landlord and tenant and related issues.

If you hear of a tenanted property for sale, we also pay a referral fee.

 

Dream House Buyer is a family owned property company that considers all types of property, and we buy property with sitting tenants too. We will make an instant cash offer for any property in the UK, regardless of the size, location, condition or value.


We will buy any property that you might consider a problem - including property with sitting tenants, flats with short leases, problem tenants, unmortgageable and structurally damaged property.  We also buy ground rents and portfolios. If you think we can help, then please invite us to make you an immediate cash offer for your property.

Contact us on 0800 1577 497 or email us info@dreamhousebuyer.co.uk



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