Landlords could avoid losing rental income when selling property
UK landlords are estimated to lose around £550m every year in lost rental income when they ask tenants to leave before selling a property.
New research by Vesta Property shows that nearly one in nine tenants has been forced to leave their home due to a change in ownership, and the figure increases to one in five tenants, aged 25 to 34.
The firm, which provides a marketplace for buying and selling residential investment properties with tenants in place, claims that the practice of advising a landlord to evict tenants before selling a property, is outdated.
It says “new models” - which offer tenants in place sale and purchase - "satisfy the tenants who want to keep their home and the landlords or investors who wish to sell or buy."
The survey of 600 tenants also found that 78 per cent want to remain in place, and a similar number regard it as “ridiculous” for a landlord to evict a tenant and sell the property to another landlord who then looks for a new tenant.
Seventy per cent said they wouldn’t care if their landlord sold as long as their existing contract and rent remained the same.
Russell Gould, Vesta Property chief executive, said: “Discussions such as enforcing three-year tenancies have raised strong reactions from both landlords and tenants who do not want to have their hands tied.
“This is not to say that tenants do not want to stay in their homes - far from it. But the answer is not to make the system more rigid, it is to move with the times and mould it into something that works for both landlords and tenants alike."
“If a landlord needs to sell their property, they should absolutely have the right to do that within a time frame that suits them and ideally without losing rental income."
“But equally, their settled tenants should not suffer and lose their home because of it.”
Richard Truman, head of operations at Simple Landlords Insurance, said: “Any ideas which not only enable tenants to stay put in a place they’re happy to call home but also prevent landlords from losing out on rental income have to be welcomed."
“Clearly the models suggested here won’t work for everyone, but it’s intriguing to see businesses create a marketplace which attempts to benefit landlords and tenants."
“Void periods are a huge problem for buy-to-let landlords at any time - and selling their property to other landlords could sidestep unprofitable periods for both parties.”