Letting agents report that properties with reliable sitting tenants are in demand as larger portfolio landlords seek out the safety of regularly-paying and hopefully Covid-proof tenants, says property expert and trainer Julie Ford.
Ford, who runs the HSPN landlord group based in Hemel Hempstead, says there has been a noticeable increase in demand among buy-to-let investors for tenant properties.
As well as Covid, she says the increase is linked to more pre-pandemic drivers including that tenants are renting for the longer term and regarding properties as their home rather than a stop gap.
Sitting tenant hotspots
Research by online letting agency Howsy shows that Leeds and Bristol have the highest proportion of stock sold with tenants in situ (at 55%), followed by Nottingham (51%), Cambridge (47%) and Southampton (40%).
Ford says landlords buying their first tenanted property should remember that the tenant will be entitled to continue to live in the property and the change of ownership does not override the tenancy agreement and the tenant’s rights.
“You will not be able to evict or increase rents until a fixed term tenancy ends and depending on when the tenant took up occupation, you may find you have a Protected tenancy which brings its own problems,” she says.
“An incoming landlord will also need to ensure the seller has been compliant and how this will impact you as the buyer, checking the original deposit has been registered and after the sale transferring it to your name, you will need to protect it again, and reissue the prescribed information.