Could you get on the property ladder without even moving? We all know the benefits of owning a property. You get stability, control and a sense of security, especially in these uncertain housing markets. You also get the chance to build up equity without worrying about rent increases.
So, if you are already paying rent for a property, what is to say you can’t simply buy that property from your landlord? You’d think your rent would exceed what your landlord pays for their mortgage, so it should be affordable. It could be that buying a property you are already renting in the UK could be the answer?
But – is it really as simple as that? What about upfront costs, deposits, fees, ongoing expenses. What about the responsibilities that come with homeownership – insurance, maintenance, repairs?
How to buy a house you are renting
Firstly – if you’re a private rental tenant, can you ask to buy the property from your landlord? The answer is yes! You can ask. But it is up to them if they want to sell.
It’s not unusual for a landlord to sell a rented property in the UK. It makes financial sense for them and it’s a good way for you to get onto the property ladder. There are a few other great advantages:
No estate agent fees
Because you’ll be buying the house directly from your landlord, you probably won’t need to go through an estate agent. So, your landlord won’t have to pay estate agency fees – and this could mean you get the property slightly cheaper.
It saves time
As long as you’re happy with the property that you rent and its location, you won’t need to search the property markets for your next home. This’ll save you a lot of time researching, visiting various properties – so it’s a quick way to buy.
There’s more chance of negotiation
Because your landlord knows you, you may be in a position to negotiate the asking price. Of course, they may still insist you buy the house at the market value – but there’s no harm in asking them to reduce the price in return for a quick, easy sale.
No competition
As long as your landlord doesn’t want to sell the house on the open market, you don’t have to worry about competing buyers. And if this is your first time buying this could be an amazing option to get a great deal.
No moving involved
Moving can be disruptive and expensive. But, as you’ll be staying put, you won’t have to experience the stress of packing, moving and unpacking. You won’t need to uproot your family and pets – no bags, boxes, removal vans – you won’t even need to say goodbye to the neighbours!
Save money
There can be a host of fees involved with buying property. There will be no removal costs and potentially no fees from estate agents to worry about, and you’ll get your deposit back.
So what can you do to get the ball rolling?
Ask!
Asking your landlord if they’re interested in selling is the obvious first step – you won’t get very far if they say ‘no.’
As a tenant, it’s probably wiser not to drop them a text out of the blue so have a proper conversation with your landlord in person or over the phone to get a rough idea of their thoughts on the matter.
They might have already been considering selling anyway as tax relief incentives have reduced dramatically over the last decade. Even if the landlord isn’t thinking of selling right now, it might plant the seed, and they may consider the possibility now you have shown interest.
Once you know your landlord is open to a potential offer, there are a few steps to take to ensure you have the right things in place before you take your first big step onto the property ladder.
Find out how much the house is worth
Get an idea of the value of your rental property – it’s pretty easy these days. Property sites like Rightmove or Zoopla can give you an idea of how much similar properties in your area are actually selling for.
Of course, you could have an independent valuation done on the property – simply ask an estate agent.
It might be an idea to get the property surveyed too, as the value of the house might drop if there are any structural problems – and you want to know what you are letting yourself in for as once you buy, the upkeep falls on you, not your landlord!
Assess your financial situation
Even if you can afford your rent, and that rent may be below the level of any mortgage, you will have other financial responsibilities as a home owner so make sure you know what you are working with. A frank, honest assessment will make sure you don’t get into something unsustainable.
You’ll need to budget for things including council tax, utility bills, buildings insurance, contents insurance and stamp duty.
Get pre-approval for a mortgage
Applying for a Mortgage in Principle will mean you can confidently negotiate with the landlord.
Make your offer and negotiate
If your landlord has already established that they’re willing to sell, now is the time to present them with a realistic figure that equates to the property’s market value. You should do this with a formal letter, backed up with a financial quote given to you by the people who valued the property.
Hopefully, the landlord will agree to the sale but if they try to negotiate the purchase price first, remember your budget and what you can and can’t afford.
Whatever you do, you might want to get advice first!
Whether you are a landlord or a tenant, we can help you navigate the complexity of the property market. Looking to sell your tenanted property? We work directly with landlords to ensure a smooth selling journey, whether there are existing tenants or not. We’re a cash house buying company who will purchase your property for cash without the need for banks or mortgages and can have whole process completed in as little as 7 days. Get in touch today!