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Buying as a Sitting Tenant in Cardiff

Mortgage Advice for First-Time Buyers

During the many years we have spent as mortgage advice experts in Cardiff, we have, together with many of our advisors, witnessed a continuous increase in the number of enquiries made by private tenants in relation to becoming First-Time Buyers in Cardiff by buying their current home from their Landlord.

As a private tenant in Cardiff, this is possible as long as you have been presented the offer of “first refusal” by your Landlord. First Refusal basically refers to the fact that the Landlord has given the tenant the option of buying the home directly from them, as opposed to going to the open market. In cases where the tenant has not been offered first refusal or is unsure whether or not such an offer has been made, we always recommend reaching out to your Landlord to confirm.

Why are more landlords offering to sell directly to their tenants?

One of the main reasons for this trend is a change in certain government policies. Buy-to-Let purchases were previously given a certain tax relief by the Government. This tax relief has now been completely removed and as such, many Landlords are faced with paying higher tax bills than they usually do.

As many Landlords will agree, the act of buying and renting out a home serves as a great long-term investment plan. This has been the case for a long time, and many still find it so in spite of the policy change of recent years and have decided to continue (even with the issue of higher tax bills), keeping the brighter future of the property market in mind.

However, for other Landlords, they have decided to sell their previously rented out homes and move on to other ventures, whether as a result of the aforementioned issue, general financial constraints, or other personal reasons.

Whatever their reasons may be, if you find yourself as a tenant of such a landlord, note that you would not exactly be doing them any special favours as there are a number of merits they will enjoy by selling the home directly to you.

They include the following:

Avoidance of Estate Agent Fees

By selling the home to their tenant, the landlord can save some money that would otherwise be spent paying estate agents.

An Easier Process

If the landlord puts the home up for sale on the open market, would-be buyers will have to schedule times for viewing the property, an activity that would prove difficult with a tenant still occupying the property.

 Refurbishment Cost Reduction

Since the landlord will be selling directly to their tenant while they still occupy the property, there will be no need to set some money aside for paying cleaners, making certain repairs (whether major or minor), and repainting if need be. Such activities would be necessary to make the property attractive to the would-be buyer, a stranger, and not for someone who already occupies the property and sees it as it is.

Absence of Rental Void

Putting the home on the open market and asking the tenant to leave (or in cases where the tenant leaves willingly) places the landlord in a position where they are unable to maintain the steady income they usually obtain from payment of rent – rental void. This is because it could take a while to find a willing buyer and complete the sale. Selling to the tenant however means that the tenant will continue paying rent until they are able to finalise the purchase.

On your part as a tenant in such a situation, here are some of the advantages:

Familiarity with The Home

You know the property in and out and understand the necessary improvements, if any, that need to be made.

Freedom To Make Changes

Buying a home you are already used to and love gives you the liberty to make any changes you want – whether as regards interior decorations or the surroundings – without the usual permission and deliberation involved as a tenant.

Possible Discount

Since you would be saving your landlord some money as the property buyer, he or she could offer you a discount from the open market price.

Absence of Property Chain

For other buyers or movers who own property already, the issue of property chain can bring about some discomfort as a buyer could be waiting for the occupant of the property to move out so they could move in, while that occupant is also waiting for someone else to move out of another property. This has hindered the sale of many properties. As a sitting tenant however, you are not burdened by this as you already occupy the property you plan on buying; you only need to meet lender criteria.

Cardiffmoneyman.com & Cardiffmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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