Over our many years in the industry, providing expert mortgage advice in Manchester, our advisors have seen the numbers rise when it comes to enquiries from private tenants interested in becoming become First Time Buyers in Manchester by purchasing the home they are renting from their current Landlord.
This is usually because they have been offered ‘first refusal’, meaning that their landlord has presented them with the offer of purchasing the home from them, instead of it just going straight on the open market. If you haven’t been offered this and are interested, we strongly recommend contacting your Landlord to ask them if this is an option for you.
A large reason why more tenants are able to purchase their home from their Landlord, is that Government has cracked down on tax relief previously available on Buy to Let purchases. These changes took effect over a period of 4 years, and now years later we are starting to see the impact of these changes as Landlords receive their tax bills.
It may be common knowledge to some already but buying and renting a property has been a sound investment for landlords over the years. The property market comes with great reward usually. It’s because of this that many decided to ride out the tax changes, seeing beyond it and ultimately a brighter future in the market.
On the flip side, many decided to call it quits and sell their properties. Even now, we see and hear of many landlords, that for one reason or another, be it financial distress or something else, decided to sell their properties and move on.
If this is the case and you are their tenant, there are many advantages to them making a deal with you, such as avoiding Estate Agents Fees. In the long run, this could save them a lot of money. Some other benefits for the landlord include.
Landlords find it quite difficult to sell a house with a sitting tenant, as generally speaking the tenant won’t agree to helping out with house viewings or work around the landlords’ time. Sometimes this leads to landlords asking their tenants to leave, or the tenants willingly doing so and moving out. This then creates a ‘rental void’, where no income is going to the landlord. Selling to the tenant guarantees rent will keep coming in the right up until the sale is completed.
If the tenant does opt to move out, the landlord will need to once over the property, maybe some minor or even major unmentioned repairs, with the possible need for cleaners and a lick of paint. This can cost a lot of time and money, in order to prepare it for sale. Selling to a tenant avoids this, as they are already living there and have taken the property for what it is.
For starters, you already know the house well and what improvements need to get made, if there are any of those. Sometimes a landlord may lack in communication or getting things done, so buying leaves you able to work on possible repairs and upgrades yourself.
There’s the side of freedom, where you are now able to do anything you want (within reason & planning permission) to the property you’ve already lived in and loved. Want to put up some pictures or paint the walls? No need to ask anymore. Always fancied changing the garden from gravel to grass and adding some decking? You’re able to do those things.
You’ll also see the benefits of there being no property chain. This can occur with other home movers and buyers who already own properties. So, for example, you could be selling your house to move into another, but the person still in the house you’re looking to buy is in turn, waiting for another to move too.
This can go on and on, depending on the case, and can prove quite troublesome for estate agents, leading some sales to fall through. The positive for you, the sitting tenant, is that you are already living in the property you’re buying so there is no existing chain. Providing you meet lender criteria, it’ll be a straightforward purchase.
Lastly, the Landlord may offer you a discount from the open market value, thanks in part to how much money you may be potentially saving them.