buying as a sitting tenant

Buying as a Sitting Tenant



We often receive calls from tenants informing us that their landlords are looking to put their property on the market, however, would like to offer the tenant the opportunity to buy the property first.

If the tenant is eligible for a mortgage and is in a position to purchase the property, this is usually the best outcome for both landlord and tenant. As if the tenant works close by or has children in the local school, moving would be an upheaval, to say the least. From the landlord’s perspective, it will save them time and money with selling fees.

Why is my Landlord Selling their investment property?

Some tax reliefs were previously set in place by the government which helped landlords but due to changing times these have been rolled back by the government. It is because of this that Landlords are having to pay more tax meaning they are having no other option but to off load their investment property.

Whether the property is sold is to the Landlords discretion. Some, such as serious investors, see it as a long-term arrangement seeing it as a sound investment from which they could benefit, whilst on the other hand amateur Landlords will normally choose to sell.

How does it benefit landlords to sell to their current tenants?

There are many reasons why landlords would prefer to sell their property to the tenant rather than list it on the open market.

  • Your landlord would save money on estate agency fees.
  • During the sale process, the landlord may be out of pocket due to the lack of rental income. As if the property is on the market for a prolonged period of time and the sale takes months to go through, this is a time where the tenant would have still been paying their rent.
  • No refurbishment is needed again this saves time and money. If a tenant moves out then the Landlord would usually have to refurbish the property i.e. decorating, new flooring. In order to make it appealing to new potential buyers

But there are advantages on both sides, such as to the tenant who is considering buying:

  1. You’re in store for no nasty surprises because you already know the ins and outs of the property.
  2. You are not in a property chain as you’ll be buying directly from your Landlord so there’ll be no waiting around. This is more time effective because it means the deal will be done much quicker.

The advantages above means you’re able to obtain the property at a discounted purchase price. This is a popular route to sell for landlords and can sometimes be referred to as ‘Sale under Value’.

Some Lenders will allow any discount the Landlord is offering to you as part/all of your deposit. If the agreed price turns out to be well below the open market value it may even lead to the providential situation of tenants not having to put down any deposit at all.

We come across this enquiry quite frequently. In this scenario, you are more than likely a first-time buyer and have lots of questions to ask. Our Mortgage Advisors really enjoy helping our customers every step of the way and putting your mind at ease throughout the whole process. Please contact us to discuss your mortgage options, we’d love to help you achieve your mortgage goals.

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