Where are they going?

[Victoriantimes]

Rightmove is overrun with tenanted property for sale. If the tenants don't want to buy their current place where are they going?

Landlords exiting in large numbers mean investors are reduced. Yet the properties are marketed for investors or homeowners. Homeowners tend to avoid tenanted properties.

A few years back tenants would move out and the landlord would refurb for sale. Then the prospective homeowner knew what they were getting. This new red tape is off putting and means people will not move.

Why do homeowners avoid tenanted properties, I’d only avoid if tenants were in situ ?

The added complication of waiting for them to move out - they often don't. You only have to read mumsnet for proof.Why would a prospective homeowner want that?

@Victoriantimes They don’t want it. Many standard would always want a property available to move into and know this would be the case. It’s the problem of getting rid of tenants. They won’t move. Landlords getting out when they can is why the rental market is so expensive. The law makes being a landlord poor value in terms of returns on capital so it’s obvious why landlords are not keen. The only landlords who will stay are larger companies and they might not mind buying tenanted properties.

Yes. Why not wait until the tenants have left (where to?) to market? Just to save the landlord a few months rent which could be added to the sale value of the refurbed property. I understand they are the most in demand but are scarcer and scarcer.

They're being sold as investments, not homes.

Investors are leaving the market, so a small pool. The properties I refer to are marketed as family homes for owners. Although that is not the current status of the property. I am saying the seller is expecting too much and can't have it both ways.

Why aren't the tenants buying. If short of money there are now 100% mortgages available.

They are moving to new rentals, and younger people are moving home to parents in large numbers.

"landlords are now competing within a market holding 15% more available homes – with the average agency branch offering fourteen rental properties versus eight in 2022."

https://landlordknowledge.co.uk/rent-growth-slows-as-supply-rises-but-investors-eye-2026-uplift/

The current crop of potential FTB are living with their parents saving a ton of money, it is going to be very hard for landlords to shift all those 1 and 2 bed BTL flats now, especially with tenants there who can refuse viewings and drop negative comments about neighbours etc. to put buyers off

" The law makes being a landlord poor value in terms of returns on capital debt"

Fixed that for you. Its not the Landlords with real capital who are jumping ship, they still have healthy returns. Its the Landlords who "invested" by heavy borrow to let that are being encouraged out. Good thing too imo. It forced up the values of flats and ftb property in particular. Now those values will have to readjust. Some have woken up to this and are trying thier luck to get out with a capital gain quickly before it's too late. In my area it's looking likley many won't succeed in many cases as the properties at the prices wanted are just hanging around. Many ftb's have also realised what's going on and are simply waiting for the adjustment whilst continuing to save.

That's way too simplistic. I rented a home worth £650K (it sold for that 1 year after we left) for £1500 per month. That's equivalent to a 2.8% gross yield to the landlord (i.e. I was renting it for peanuts). Put £650K into the RM mortgage calculator. Include a 5% deposit (min RM). Take out a 40 year term (because folks love to be fleeced). At an interest rate of 4.5% (avg). The mortgage would be £2777pm. Now add the maintenance costs. Renting was a gift.

You had a bargain rent wise, your landlord missed a trick. Did you move to another rental and if so, how much is that? 650k house round here would be £2,500 minimum.

I don't think that the LL had much choice. A sensible 10% gross yield would be unaffordable to nearly everyone in the area concerned. No, we bought a property. Even in your area it is more affordable to rent that property than buy it. Remember to add in all the additional costs such as maintenance and service charge (where applicable) that an owner would be responsible for.

But it's not just a couple of months rent though. It's full council tax, water and utilities, service charge and ground rent, insurance etc.

The outcome of not selling or selling for a half decent price is worth a few months rent.

Did you buy a property with tenants?

No. Why? I wouldn't choose to be a landlord. It's a terrible investment. It's illiquid. The costs are horrific. It's a bureaucratic nightmare. The returns are meagre. It's not diversified - all your eggs are in one or two baskets (most LL's have fewer than 3 properties). You can go months with no return (voids).

My preference is to invest in a well diversified portfolio with low ongoing costs and no calls to fix a boiler in the middle of the night.

Lol

Do you live in some sort of parallel universe where people can afford mortgages at these current rates?

I pay £625 per month in rent (Midlands) and earn £2200 per month (our only income)

4 people 3 bed victorian semi.

Food £500 (often more)
Utilities £220
Council tax £116
Car expenses £150
Other transport/travel/school dinners/prescriptions/clothing/having a small go at a life and some activities for the kids/small savings pot for emergencies = the rest.

Where, pray tell am I supposed to find the £400 extra a month that a mortgage would demand of me? Plus insurance, maintenance ect

UC does not include housing costs for home owners.

By buying this property I would be royally fucking myself over.

It’s not just a few months rent
It can cost Landlords £10/15,000 in fees to get a tenant out if they insist on waiting for the bailiffs these days.

More if they stop paying rent

So landlords are selling up with tenants in situ.

Many are trying to sell up, I"m still not sure who is supposed to be buying basic ex-BTL flats now though, sales seem to be way down in many areas, and if being a landlord is so bad who would even think of buying with tenants still there?

Cousin recently sold to a company setting up business in the area

EA said they were buying louds.

Do they have a website?

🤣🤣
they were seriously dodgy when I looked them up

The ‘business’ address was a basement under a nursery in a London suburb ( her house isn’t in London )
They also had ( I looked on companies house) other really dodgy sounding companies that they seem to be switching money around but not doing much more.
The property sold last December according to LReg but my cousin didn’t get her money till January and when she told me I noticed later that the property had sold again to another company ( diff people same surnames )!

They basically bought her property for £40k less than they sold it for to another company ( within 2 weeks ) They clearly didn’t have the money to buy hers in the first place so waited till they sold it and only then gave the money to her.

All set up ( I think )
by a one man band EA who overpriced two years prior by 100k and then after no sale suggested these guys. He also suggested the ‘conveyancer’.

So do any of them have a website
No
but Theyve probably got a lot of washing machines

There are companies that are buying rental properties to rent from landlords. When you follow the money up the tree from the company you often find they are a subsidiary of a private equity firm or a bank. Or they have a very large portfolio (hundreds of properties).

"Professionalisation" of the landlord system is a double edge sword. Whist no-one can say that the industry didn't need regulation and no-one wants slum landlords who keep their properties in dangerous conditions, huge essentially private equity firms or large portfolio companies also come with issues.

My brother's flat (he is renting) was sold about 18 months ago to a large portfolio landlord investment company (when you follow the money they are a subsidiary of an American private equity firm), they bought pretty much the whole block of 10 flats as a job lot from their previous landlord. He has lived there 8 years with only 2 small rent increases of £50, 2 free allocated parking spaces, very small maintenance charge to cover monthly tree/ grass cutting in the communal garden march - october (done by a local maintenance firm) and fortnightly cleaning/ repair of communal hallways and doors (again local firm). They had the landlords contact details and the landlord organised repairs through his various tradespeople who were local trades and always came out in a timely manner.

Since the investment company has taken it on, every tennant has got new contracts. Rent has gone up to market rate, there are yearly rent increases set a x% to ensure the property will always rent at market rent, the car park is now managed by a 3rd party and permits are £70 per year per car and a barrier system has been put in which requires you to have a fob or key code to get in (the flats never experienced any parking issues - they are not near town/ train station/ restricted parking areas so only residents and their guests parked there so permits were not necessary). Maintenance fees are now set at triple what they were and are now paid to the companies 3rd party maintenance company who come out once a month to cover all maintenance. Said maintenance company has also decided a very large "scheme of modernisation and repair" is needed (it isn't, communal spaces were well maintained and in good condition). In effect they are re painting hallway walls, replaced hallway carpets, installing heat pump systems and therefore upgrading all boilers in the flats, installing extra insulation and have decided to take several of the trees down in the communal garden. There is a 3rd party emergency and maintenance phone line, who if there are issues with your property you ring and organise repairs with. This company deal with multiple portfolios and apparently are a nightmare to get hold of or get timely repairs from unless it is an emergency (boiler or water related). There are quarterly inspections and inventories taken (again all done by a 3rd party). They are looking to buy and are currently hunting for somewhere else to live.

Not everyone can get a mortgage. Low or unpredictable income, bad credit rating, etc . And not everyone wants to buy, eg if they move around a lot .