Opportunity For Tenants To Buy From Landlords in Manchester
Offering Mortgage Advice for Tenants looking to buy from their landlords
Mortgage Advisors in Manchester
We have recently seen an increase in the number of enquiries from private tenants who are looking to become First-Time Buyers in Manchester by buying from their Landlord. This is because they have been offered “first refusal” to buy the home they are renting. If you haven’t been offered this and are interested, it’s definitely worth asking them the question.
Why are more tenants being offered the opportunity to buy from landlords?
The main reason more tenants can buy from their landlord is that Government has cracked down on tax relief previously available on Buy to Lets. Some of these changes were “phased in” over a 4-year period. Therefore, we are only now starting to see the impact of these changes as their tax bills land on their doormats.
As many people know, the property has been a sound investment for Landlords over the years. So much so, many have decided to ride out the tax changes because they are in it for the long term. However, if your Landlord is tempted to sell, then there are lots of advantages to them:
- 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. Therefore, 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 a lick of paint, or two. Sometimes it can even require more significant refurbishment to get it “ready for sale”.
There are also advantages to the First-Time Buyer tenant buying from their landlord:
- You “know” the house well and what improvements need to be made, if any.
- There is no “chain”, so the sale is less likely to fall through.
- The Landlord may offer you a discount from the open market value because of the costs they are avoiding.