Advantages for Landlords and Tenants In my years as a mortgage broker, I’ve noticed an increasing trend of first-time homebuyers buying from their landlords – or as it is sometimes known, purchasing as a sitting tenant.
When you rent privately, there may come a time when your landlord gives you the option to buy before anyone else, or “first refusal”. If this hasn’t been extended to you, or you’re uncertain whether it’s a possibility, it might be a good idea to discuss this with your landlord.
The central factor can be traced to changes in governmental policies. Tax advantages once linked to buy-to-let mortgages have been phased out, leading to substantial tax bills for many landlords.
In spite of this, buy to let mortgages in Bristol can yield substantial profits over time. However, these investments can also come with significant costs, prompting landlords to sell their properties and perhaps venture into different areas. As a renter, you may end up with a unique opportunity to purchase your rented home directly from your landlord.
Their motivations may differ – personal circumstances, financial reasons. Still, the reality is there are unique advantages, both for you and the landlord, when selling directly rather than going through estate agents.
They’ll save a significant amount of money traditionally reserved for agency fees by selling to a tenant.
Opening the home to potential buyers for viewings can be challenging with a tenant in occupation.
Since they are selling to an existing tenant accustomed to the property, the landlord avoids expenses linked to cleaning, fixing, or cosmetic improvements.
By not placing the home on the open market, landlords continue receiving rental income until the day of sale completion.
You have lived in your home, you have grown to love it, you know it both inside and out. This takes out the element of surprise, as you already know all the positives and all the flaws.
Buying a home that you are already living in allows you to make all those changes you would’ve wanted to make.
Since there is a likelihood you could be saving your landlord some money from buying the property, it is very likely (as we have seen in our own experience) that they could offer you a much more discounted property price, than would be on the open market.
A property chain is where one person is waiting for another to move out, so that they complete their own sale. The person they’re waiting on, could unfortunately be waiting on someone else.
This can create a very stressful situation for all involved and has caused a lot of property sales to suffer the consequences. Sitting tenant purchases, however, do not have the burden of a property chain.
Date Last Edited: February 9, 2024