Landlords looking to exit the private rented sector following the introduction of the Renters’ Rights Act are being urged to consider selling properties with tenants in situ rather than pursuing vacant possession.
The advice comes as growing numbers of landlords reassess their position following the implementation of the legislation in May, which abolished Section 21 notices and introduced significant changes to the way landlords can regain possession of their properties.
While landlords can still sell a property and seek vacant possession through the new Ground 1A under Section 8, the process requires a minimum of four months’ notice, evidence of a genuine intention to sell and, in some cases, court action if tenants refuse to leave.
As a result, some landlords are opting to market properties directly to investors with tenants remaining in occupation. In these cases, the tenancy continues uninterrupted and the new owner assumes responsibility as landlord.
WIDER BUYER POOL
According to We Buy Any Home, selling with tenants in place can help landlords avoid lengthy possession processes, reduce void periods and potentially widen the pool of investor buyers actively seeking income-producing assets.
Elliot Castle (main picture), Chief Executive Officer of We Buy Any Home, says: “Such drastic industry changes inevitably result in a real increase in landlords who want out, and quickly. The Renters’ Rights Act was the tipping point for a lot of people.
“Removing Section 21 notices means landlords can no longer rely on having a straightforward exit from a tenancy, and for smaller landlords especially, that uncertainty is too much.”
He adds: “Ground 1A exists, but it’s time-consuming, conditional, and carries penalties for misuse. For many landlords, selling with the tenant in place is simply more practical and could potentially save a lot of time and money.”
TARGETED MARKETING
Castle says landlords should ensure all compliance documentation is up to date before marketing a tenanted property, including tenancy agreements, deposit protection certificates, EPCs and gas safety records.
He added: “The choice of buyer matters just as much. If you go through a traditional estate agent with a tenanted property, you’re immediately narrowing your pool – owner-occupiers won’t want sitting tenants, and you’re essentially hoping an investor finds you.
“You’re far better off targeting investors directly from the outset. A lot of sellers don’t realise there are buyers who actively want tenanted properties – and that it can be a much cleaner, faster process than they expect.”
Castle concluded: “Don’t wait until you’re desperate. The earlier you start the process, the more options you have – and the better outcome you’re likely to get for yourself and your tenants.”
