Landlords are increasingly opting to sell properties with tenants in situ, a shift from the traditional approach of seeking vacant possession. This method allows properties to continue generating rental income while a buyer is sought, potentially strengthening the seller's position.
Traditionally, landlords often aimed for vacant possession, tidying properties for the open market to achieve the highest possible price. However, some landlords using Section 8 to sell could face 12 months or more with an empty property after gaining vacant possession. This has led many to consider that maximising every pound might not always equate to the best overall outcome, especially when considering potential court delays and unexpected costs.
Investors are reportedly more active in the current market, making up over 14% of all transactions in July, according to Hamptons. Many of these buyers are looking for 'turnkey' opportunities – keenly priced properties with established tenancies that allow them to collect rent immediately. This suggests that evicting tenants might make properties less attractive to this segment of buyers.
In a buyer's market, a tenanted property can provide a position of strength, as the landlord is not under immediate pressure to sell quickly due to ongoing costs of an empty property. While Rightmove and Zoopla have reported that sellers must be realistic about pricing, with Hamptons data indicating 56% of investor offers were at least 10% below asking price, the difference in price for a faster sale with fewer costs and risks could be around 6.5% when compared to the average 3.5% discount across all sales.
Offsetting this against saved costs such as redecorating, replacing fixtures, council tax, insurance, utilities, security, and mortgage payments on an empty property, many landlords are choosing to accept a slightly lower sale price for a faster transaction.