Guaranteed Way to Sell a Property with Regulated Tenancy

Selling a property with a regulated tenancy or a lifetime tenancy can be much harder than selling a normal tenanted property.

Any property let before 15th January 1989, whether furnished or not, is on a regulated tenancy whereas from 16th January 1989, tenancies issued have been assured or assured shorthold tenancies.

Regulated tenancies or lifetime tenancies give the tenants the right to occupy to remain in their property for life.  This gives tenants security.  Tenants pay a ‘fair rent’ that is set by a Rent Officer from the Valuation Office Agency.  This rent is far lower than the market rent for the equivalent property.  The rent can only be increased every two years through an application to the Rent Officer by the landlord.

With an AST, the landlord is responsible for internal repairs.  With a regulated tenancy, the tenant is responsible for the internal condition of the dwelling.

 

Properties with regulated tenancies are often sold in auctions for around 40% of their value.  This is because of restriction placed on rental increases and the lifetime security of tenure.  With a regulated tenancy, there is a succession clause which means that tenant can pass on the benefit of lifetime tenancy to their surviving partner or a relative who has lived there for at least two years. 

Investors know too well that upon demise of their original tenant, he/she can pass on the succession rights, meaning that any chance of gaining possession, refurbishing the property and sell it – are quickly diminished.

There is little incentive for the tenant or the landlord to improve the property meaning that a substantial refurbishment will be required to an unmodernised property, should it be handed back to the landlord.  This reduces the appeal of selling a house with a sitting tenant on the open market.

Selling an unmodernised property with a regulated tenancy can be difficult as they are unmortgageable, and there is no vacant possession.  The rent is unlikely to cover any mortgage repayment and since a surveyor is unlikely to gain access, there is no chance of being able to sell it.

Selling a property with a lifetime tenancy in auction can be risky.  This is because the auctioneer will insist that you put in a very low guide price around 40% of value of similar unmodernised properties that come with vacant possession.

Your reserve price, a price that you will be obliged to sell at, can’t be more than 10% above its guide price so let’s say if the guide price of your property was £100,000 then reserve price can’t be more than £110,000.   There are lots of pros and cons of selling a property at auction – from upfront fees to no guarantee of a successful sale.

It makes sense to a genuine cash house buyer such as Property Saviour.  We will make you a cash offer for your property.  There are no estate agency or legal fees because we will pay £1,500 towards your conveyancing fees.

Property Saviour guarantee to buy any house in any condition so you do not need to get builders in.  You can sell your property as it is.

With a guaranteed cash payment means there is no fuss or delays – selling your regulated property could not be easier.

If you accept our cash offer, we can complete the purchase in as little as two weeks.  We will indemnify the searches meaning there are no delays.

error: Content is protected!