Buying as a Sitting Tenant in Doncaster
An increasing number of mortgage enquiries are being made by tenants looking to buy the properties that they currently rent. Many landlords are offering their tenants “first refusal” to buy the home they are renting.
It is certainly worth approaching your landlord and asking the question. Would your landlord offer you the same chance to buy your rented home?
Why so many Landlords sell their property to tenants?
There is a reason why there is currently an increase in these enquiries. The Government has cracked down on tax relief previously available on ‘Buy to Lets‘ and as some of those changes were “phased in” over 4 years. It is only now that the landlords are seeing the impact of these changes on their tax bills and so they are now considering selling their properties.
Property has always been a good investment, viewed as one of the best long term investments and this is the same for the landlords and as such many have decided to ride out the tax changes as they have looked at their properties as a long term investment.
If your Landlord is 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
- Lost of rent – it’s 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”
Advantages for the tenant buying the property they rent:
There are advantages as a tenant to buy the property that you rent;
- You “know” the house well, have some insight into its recent history.
- You will probably understand and know the condition of the house and, if any improvements may need doing
- There no moving in date, so no time delay,
- 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