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Landlords losing money by selling properties tenant free

More than £500m worth of rental income is lost annually in this country because buy-to-let landlords are often encouraged to sell properties tenant free, new research shows. 

After evicting tenants in order to sell, the average landlord will lose just over three months’ rent, based on the average time taken for a property to sell from point of marketing, according to online buy-to-let marketplace Vesta.

Based on rental data from HomeLet, the loss to a single private landlord typically ranges from £2,757 to £5,514, while Vesta estimates that the total loss to private landlords in this country ranges from £551m to £1.1bn.

The old fashioned practice of evicting good renters is not only losing private landlords critical income, but it is also causing unnecessary distress and costs to thousands of long-term tenants who have to find alternative accommodation as quickly as possible, according to Russell Gould, Vesta’s chief executive.

He commented: “The practice of landlords evicting perfectly good tenants when they want to sell their property is outdated in this day-and-age  and highlights that the sector is long overdue for reinvention and transformation.  

“You really have to question a process that loses rental income for the seller whilst putting the tenant through huge amounts of stress and cost when it is totally unneccessary.”

He added: “Forecasts suggest that 380,000 private landlords are planning to sell their properties in the next 12 months resulting in thousands of tenants facing unnecessary evictions. 

“We want the buy-to-let sector to realise that there are viable alternatives to the traditional model that are both socially responsible and financially beneficial to investors, landlords and their tenants.”

Poll: Have you ever bought or sold a property with a tenant in situ?

PLACE YOUR VOTE BELOW

  •  G romit

    that's 200,000 properties per year.

    Where does this figure come from?

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    Thin air?

     
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    More often than not in my experience, when a house is tenanted it does not look its best. It is only rarely that I have had a tenant that has improved the look of a property or garden - and the vast majority leave it worse than it was at the beginning of the tenancy. So the price is likely to be better for the vacated property which can be spruced up - this would more than offset the loss in rental income. That is why landlords do it!

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    I lost a long term tenant early this year. Actually it was a SARB that I bought years ago but with the family in place I never had the opportunity to do a full refurb that was definitely required. I wouldn't have been happy reletting it as it was to be honest. I have an agent that found a buyer early on, who was actually a corporate landlord owned by an out-of-area council. The company, despite their owners being who they are, do not generally buy houses with tenants in situ or buy properties that need a lot of work. So... whilst I spent 17k on the refurb I got a very quick and reliable buyer and broke the ceiling price for the street as the house was looking very, very good.

     
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    I tried to sell a flat with a sitting tenant, but they wouldn't co-operate with keeping it tidy, being there to show buyers round or being out so agent could show buyers round. I got offered £20k less because it was a tip. Luckily I persuaded them to move to another property just vacated, spruced it up and got £30k more. I then didn't renew the lease on my other property to which they had moved, spruced it up and got £200 per month more from new better tenants! Sweet revenge! However our SNP lefty loonies are trying to stop Scottish landlords doing what they want with their own properties, so my timing was perhaps fortuitous. Bottom line? Take the hit on the lost rent. You'll get a much better price if you stay in control of its presentation rather than trust scruffy tenants.

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