Like you, every property is unique, so we’ll just need a few details before we can make you an offer.
After several updates to the laws and legislations that landlords now have to obey, it’s raising the question of whether landlords are going to keep their properties or cut their losses and sell up.
According to a survey done by the RLA (Rental Landlords Association), one in four landlords are now planning to sell at least one property in the next year. In this same survey, 15% of landlords said that they were looking to buy at least one property in the next year, so it’s difficult to tell exactly what the stance is.
If landlords decide to sell and the demand outweighs the supply of rented accommodation, renting will become more expensive. It’s expected that there will be a 3% increase in rental costs every year for the next 5 years. This is likely to be area-specific though; landlords in the South are tending to have more trouble compared to those who own property in higher-yield areas such as the Midlands and the North.
Why is now the time to sell?
Since June 1st 2019, new rules were implemented to protect tenants in rented accommodation tenancies. Some of these rules mean that deposits are now capped at 5 weeks rent and that agents are no longer able to charge tenants fees for things such as referencing, inventories or contracts. This can result in a potentially higher bill for landlords, which has lead to some landlords deciding to sell their properties instead of having to adhere to these new rules.
What should I consider?
There are a few things to keep in mind if you’re considering selling the house that you’re currently renting out.
Selling tenanted property: Whilst experienced investors or landlords might be interested in taking a property with tenants already in, it can be intimidating for first-time buyers. If an investor does show interest it can be a big plus as it means you can make a chain-free sale, you are likely to be cutting out a lot of other potential buyers when selling a property with tenants in it.
Selling the vacant property: There can be lots of admin involved if you have to evict current tenants. You may also have to spend some time and money cleaning or redecorating the house before it’s ready to sell depending on the previous tenants, and you will face a loss of rental income for the period that your property is up for sale.
Capital gains tax implications: Buy to let properties are subject to capital gains tax, and if your property has experienced a significant growth in value you may be faced with a high tax bill after your sale.
Mortgage implications: If your mortgage on the property was fixed-rate, you may have to pay an early repayment charge depending on your lender. This can be as high as 5% on a 5-year fix, so it’s worth looking into this to make sure there aren’t any hidden costs.
Ultimately it’s up to you and how much you feel you’re going to be implicated by the changes that have come in. If you’re considering selling your property and are interested in a free quote, contact We Buy Any House today and see what we can do for you.