Over the years, we’ve encountered numerous first time buyers in Nottingham aiming to step onto the property ladder by purchasing the home they currently rent privately from their landlord. This process is sometimes known as buying as a sitting tenant.
As a private tenant, there’s a possibility that your landlord may offer you “first refusal” – meaning they give you the opportunity to purchase the property directly from them before it goes on the open market.
If you haven’t been offered first refusal or are unsure about the possibility, we advise reaching out to your landlord to inquire further.
Why are more landlords offering to sell directly to their tenants?
The popularity of buying from landlords has grown significantly due to changes in government policies. Previously, landlords enjoyed tax relief benefits on buy to let mortgages in Nottingham, but this option is no longer available. As a result, many landlords now face higher tax bills.
Despite the loss of tax advantages, buy to let investments can still be a lucrative long-term option, yielding substantial profits over time. The expenses associated with these investments can become significant, leading some landlords to sell their buy to let properties and pursue other opportunities.
In such situations, you, as the tenant, might be given the opportunity to purchase the property directly from the landlord. There are numerous advantages to this approach, as it allows for a more straightforward and private transaction, compared to selling through estate agents in the open market.
Landlord Benefits
Avoidance of Estate Agent Fees
Opting to sell to the tenant directly can result in significant cost savings for the landlord. Instead of paying hefty estate agency fees, the landlord can avoid these expenses altogether through a more straightforward transaction with the tenant.
An Easier Process
Listing the home on the open market would require potential buyers to schedule viewings, which could be challenging if the property is still occupied by a tenant. Selling directly to the tenant eliminates this inconvenience, making the process smoother and more efficient for both parties involved.
Refurbishment Cost Reduction
When selling directly to the tenant, there is no need for additional work on the property. This means no expenses for cleaning, repairs, or repainting, as the tenant is already familiar with and fond of the property’s current condition.
Unlike potential buyers who haven’t seen the place before, the tenant has personalised and adapted it to their preferences, making it a hassle-free and attractive option for them to buy.
Absence of Rental Void
When putting the home on the open market and asking the tenant to leave or if the tenant voluntarily decides to move out, the landlord faces the risk of losing a steady rental income.
Finding a buyer might not happen immediately, leading to potential months without rental payments. By selling to the tenant, they can continue paying rent until the sale is completed, ensuring a continuous income stream for the landlord throughout the process.
Tenant Benefits
Familiarity With The Home
Living in your home gives you a unique advantage – you have grown to love it, becoming familiar with every aspect of it, both its strengths and weaknesses. This eliminates any surprises, as you are already aware of all the positive features and any potential flaws.
Freedom to Make Changes
Purchasing the home you are already living in gives you the freedom to make the changes you’ve always wanted.
Whether it’s removing a feature and installing a new one or getting creative with paint, you have the autonomy to personalise your home without needing to consult a landlord. It becomes truly yours to customise as you please!
Possible Discount
As there is a possibility of saving your landlord money by purchasing the property, it often leads to them offering you a more discounted price compared to what you might find on the open market.
Based on our experience, this scenario is quite common, presenting an excellent opportunity for you to secure the property at a more favourable price.
Absence of Property Chain
A property chain can be a frustrating experience for both home buyers and home movers in Nottingham. It involves a sequence of buyers and sellers waiting for each other to complete their transactions. This waiting game can lead to stressful situations and delays in property sales.
Sitting tenant purchases offer a significant advantage – they eliminate the burden of a property chain. Since you already live in the property you wish to buy, you can avoid the complexities of coordinating multiple transactions.
Your main focus will be on meeting mortgage lender criteria, making the process smoother and less stressful.
Date Last Edited: November 21, 2023
