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There are signs that the number of tenanted properties being entered into auction may be on the rise.
Nearly 250 Lots guided below 250K, all with AST tenancies, are coming through the auction rooms during February.
Some numbers for you:
49 Lots Guided 150-250K25 Lots Guided 100-150K165 Lots Guided <100K
Interesting that it is mostly low value stock sub £100K that is hitting the auction rooms.This will be a useful on-going metric as to if landlords are selling up in droves because of Section 24.This post was reproduced with the kind permission of the original author, David Humphreys, using data from EIG. CLICK HERE TO GET YOUR FREE SECTION 24 SURVIVAL GUIDE Please do let us know if your local auction house has more and more tenanted properties for sale!SEE ALSO - Options - selling up due to Section 24UP NEXT - 440K landlords forced into higher tax bracketDON'T MISS - S24 / Stamp duty - Properties not selling!NOW WATCH:
and this is only the start
If the market collapses it could be a good time to buy on yield only
Learn Change and Adapt ?????
Sign of desperation putting tenanted properties into auction.
Really any LL not desperate would remove tenant and sell on open market and invariably achieve a good market value
Having an incumbent tenant who would cost thousands to evict is forcing the hand of desperate LL who simply can't afford eviction costs
They are therefore resorting to the auction market.
They will not achieve very good prices.
But quite frankly they just want shot of their new millstone properties.
It is highly unlikely that if they do find a mug LL to buy that the existing tenant will remain
They may be given a new 6 month AST then after 6 months a new rent increase which the tenant can't afford and they will he evicted.
This auction situation just shows how quickly S24 realisation has now hit dopey LL
They should have sold in 2015 like more astute LL did............A Bryant!!!!!!
The pack of cards is now collapsing.
Wonder how many LL will face shortfalls in mortgage repayment following auction sale
I'm not even sure if lenders allow property to be sold at less than mortgage debt!?
I`ve bought houses through high st agents at less than I would have paid at an auction
An auction is just one route to market . People get over excited in them and pay over the odds
A tenant in situ can be a real bonus to both buyer and seller.
Rent from day one and minimal set up costs
Jonathan Clarke. https://www.buytoletmk.com
Low end stock may indicate that it's a combination of UC and S24.
Just as many of us have been saying here and elsewhere, it's the tenants at the low end of the market who are really going to suffer, not LLs. LLs can sell up and get out. Tenants are either evicted before the sale, or face rent rises or eviction following the sale.
I would agree with you
Yes and isn't it incredible that Shelter support it
There is a difference between a property being put into an auction & it selling
i'd be more interested in the sales achieved numbers
are would be sellers and would be buyers thinking about the same sort of ££ as each other??
I would take these properties actually having genuine current ASTs with a pinch of salt. I remember a few years ago looking at a couple of AST'd auction properties that were anything but. A quick chat with the neighbours and I discovered they were empty and had been for some time.
If anyone is interested in this sort of purchase, go and look at the property and make up your own mind whether it is actually tenanted or not.
Unlike JC taking on another LL tenant to me is like a man looking after somebody else's child
Something I would prefer not to do
A property with a tenant in situ is one I would not buy until the tenant has been removed or unless the tenant passed my RGI requirements etc.
No way would I rely on the referencing carried out by whoever on the previous tenant
I might if the tenant had passed RGI checking less than a month before completion or they had LRS Tenant Passport valid for 90 days that qualified them for RGI
Otherwise forget it!
Any LL wishing to compete in a property race with a tenant in situ is welcome to win the race
Eviction could cost far more than than the new LL could ever imagine.
Without RGI the new LL is stuffed
Completed on one last week with a tenant in situ
I went to see them at the start of the process as I always do
This is before any money is spent on legals or surveys etc
I interviewed them just as i would any other prospective tenant
They are also a useful source of info to find out if anything doesn't work in the property
They don`t hide the truth whilst the vendor and the agent might be tempted to
If they failed the interview I wouldn't have bought at the price they wanted
As it was they ticked nearly all the boxes so I positively wanted them to stay
If they don`t tick the boxes then that just translates into a offer price reduction
At some point the reduction makes it viable to take on the tenant and the owner to get rid
That reduction gets greater when you find the paperwork is not in order. I kinda prefer that
Had one recently where the AST was not signed in the right places and the actual address was wrong
I immediately think well thats another 3K I can knock off the price
I just make sure I get a new one started signed up for the completion date
The vendor knows when there are problems with paperwork so will soften on price especially if the tenant wont open the door to you
Did one about 5 years back. Never got to see inside the house..
You take a view on what you want to pay . That was a clients purchase
I admired his gutsy approach. Bit like that programme Storage Hunters
You get a peak from the outside but thats it. Then you make your bid....
I wish i could do that guys voice. I speak quite fast when i get excited but hes something else