Buying as a Sitting Tenant

Here at Coventrymoneyman, there are a few recurring situations that we see on a regular occurrence. One of those is tenants who are in a situation whereby their landlord is looking to sell the property they are living in and they wish to buy it. This can be a great arrangement for both parties. Landlords can find it hard and expensive to sell to the open market. Therefore, those buying as a sitting tenant can often have the first refusal on the property.

Why is my Landlord Selling up?

Being a landlord once meant that there were tax reliefs available to you, but the Government has clamped down on these. As a result of this, many landlords are now paying more tax than before. Therefore, they are looking to sell because it is no longer worth their while.

Generally, we’re seeing smaller, amateur landlords selling rather than the large, professional ones. Serious investors tend to keep their properties either way as they view it as a long-term arrangement. They will ride out legislative changes because they still view the property as a sound investment.

Why is it better for Landlords to sell to Sitting Tenants?

Here are a few reasons why a landlord may opt to sell to someone who is buying as a sitting tenant:

1. It avoids paying commission to Estate Agents.

2. It avoids “loss of rent”. If you move out as a result of the Landlord deciding to sell, then there could be a gap between you ending your tenancy and the house being sold.

3. No refurb costs. If you move out, then the Landlord will have to make the property ready for sale. This might mean forking out for redecoration or new flooring, all eating into their profits.

As well as advantage to the Landlord, there are advantages to those buying as a sitting tenant:

1. You know the property and all its faults. No nasty surprises for you!

2. No chain. You are not having to wait for the owner to find a property before you can complete. As such, a deal can be done quickly.

3. Discounted purchase price. Given the advantages listed above, it’s normal for a Landlord to sell to a sitting tenant at a discount. This is also known as a sale undervalue.

When it comes to acquiring a mortgage, some lenders will allow any discount the Landlord is offering to you as part/all of your deposit. This means that you may not to have to put down any deposit if the price is significantly under the market value.

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Mortgage Advice in Coventry Open & Honest Mortgage Advice in Coventry & Coventrymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.

UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

Coventrymoneyman – Sherbourne House, Humber Avenue, Coventry, CV1 2AQ. Tel: 024 7688 0948

The Financial Conduct Authority does not regulate most buy to let mortgages.

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