We will highlight a few reasons why we are seeing more landlords selling their tenanted properties and the potential problems that they may face if they decide to try selling with a tenant in situ.

The buy to let market has really cooled in recent times and with good reason! The biggest of those being it’s just not that profitable anymore. Let’s have a quick look at just a couple of the main reasons why:-

Rising interest rates.

For those of you that have been the property market for as long as we have you may well remember the rates of the 70’s and 80’s where we saw base rates of nearly 15%, but for those lucky enough to buy a property between 2009 and 2022 the bank of England base rate has been consistently under 1% so to jump from 0.25% in Dec 2021 up to5.25% now is quite a leap when the fixed rate deal they are on comes to an end many will only see small returns or worse negative returns.

Section 24.

This is the reduction of mortgage interest rate relief from 100% down to 20%, to put it simply this is the removal of private landlords ability to offset there mortgage interest costs against their profits. In my opinion a quite unfair piece of legislation brought in by the finance act of 2015 this has pilled further pressure onto landlords and in turn the private rental section as landlords leave the market.

A landlord has two potential income streams the rent and capital growth (the increase in value over time) if the monthly profits are being eroded but the markets buoyant many landlords might decide to weather the storm after all the assets increasing in value, however all the predictions seem to be pointing to a downturn so it’s hardly surprising so many are deciding to sell up.  

Conclusion.

Selling a tenanted property comes with its own issues not least of which dealing with the tenants after all it’s their home that’s being sold hardly surprising they would perhaps be reluctant to do viewings if they’re worried the next owner might not be a professional landlord or may wish to live in the property themselves.

The reality is that to get the best price for your property you would need to sell with vacant possession and this can take a considerable amount of time and expense to achieve assuming of course that you want to serve notice on your tenants.

When you do gain possession you may well find that the property now requires some updating works such as decorating, maybe kitchen or bathroom remodelling etc to get that elusive best price, which of course takes further time and money but will ultimately get you full market value for your asset.

Another option that’s available to you is to sell your portfolio as a whole, part or even just a single house to a professional cash buyer such as Jeffries property buyers.

A professional landlord and cash buyer such as Jeffries property buyers will be able to complete quickly with the least disruption to your tenants just one viewing is all it normally takes and your tenants can rest assured that as a professional landlord they can stay as tenants in their home.

If you would like to discuss the options for selling your portfolio or tenanted property please contact us on Telephone: 01785 817113