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  • Auction Tribe

    More tenanted properties appearing at auction



    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 150-250K

    25 Lots Guided 100-150K

    165 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 24

    UP NEXT -             440K landlords forced into higher tax bracket

    DON'T MISS -        S24 / Stamp duty - Properties not selling!

    NOW WATCH:

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    and this is only the start

    If the market collapses it could be a good time to buy on yield only

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    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!?

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    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

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    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.

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    I would agree with you

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    Learn Change and Adapt ?????

    Yes and isn't it incredible that Shelter support it

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    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??

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    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.

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    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

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    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

     www.youtube.com/watch?v=ifzvh3UW3Ng

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    Jonathan Clarke. https://www.buytoletmk.com