Half of UK tenants want to buy their home from their landlord

[Mark Rocks]

New research shows that half of UK renters currently want to buy out their landlord. 

Half of us in the office think this is because the incredibly hot rental market means that buying out your landlord would be an easier path. 

And the other half think it’s a sign that landlords are increasingly providing really high quality properties for tenants. 

These actually reflect the actual research quite well! 51% of those surveyed said it’s because of the location, and 38% say it’s because they want to avoid the hassle of moving.  

Have you ever sold one of your properties to a tenant? Let us know if you’ve got experience with this...

https://www.propertyinvestortoday.co.uk/breaking-news/2022/1/half-of-uk-renters-want-to-buy-out-their-landlord--study

[apsilon]

I haven't personally, but if I was looking to sell, I probably would, if only to minimise the hassle of flogging a property with tenants in. To be honest though, and going a bit off-tangent, I find that article a little disingenuous. I think most people would acknowledge that a high proportion of renters would buy if they could, but the fact remains that most renters cannot afford to buy. They could certainly afford the mortgage, but the deposit will always be the killer. Scraping together a 10-15% (or more) deposit is difficult when covering existing living costs. There is often no spare cash and with the cost of living rising year on year and wages stalling, it's only going to get worse. I genuinely feel for some of my tenants because while I (as a landlord) appreciate I provide a necessary service, I also know that I am part of the problem. Specifically, and taking into account their lack of earning potential, I'm preventing them from being on the property ladder and thereby denying them the chance to own something that could be hugely beneficial for their future.

Renting is great if you have money. Renting isn't great if you don't.

[GT1298]

As it happens, one of my tenants has just approached me to buy the property they rent. !

It's possibly an opportunity to move on a property that would need some work doiung at some point in the near future. But calculating my costs is far from simple due to it previously being my man residence. So working out how HMRC will calculate CGT is a real dilema.

I'd be interested to hear anyone elses experience.

[Mark Foden]

I would be interested to know if there are any initiatives that assist the renter buy the property and raise a deposit. I have a great tenant who has made it his home. Before I sold would want to give him the opportunity to buy and assist if I could.
 

Id happily structure a deal that assisted my tenant even if it meant I loaned the deposit to be paid back interest free over defined period but was tied into the ownership or sale of the house. Are there formal initiatives or would this be something I would need to structure with him and our  solicitors

grateful if anyone has experience of this, in particular any initiatives

thanks

[Mark Rocks]

I love that you'd be open to a plan like this @Mark Foden

Sounds like you have a great relationship with this tenant

[laura__]

I have heard of a strategy called 'Rent to Buy' where the tenant pays their rent (sometimes discounted) and also pays a 'top up' which the landlord keeps in a separate client account and that top up creates the deposit for the house that the tenant will ultimately purchase off the landlord. The agreement is generally 3, 5 or 7 years (but can be longer) and during that time any maintenance is the tenants responsibility  (kind of like a private shared ownership I guess). If for any reason the tenant doesn't pay their rent, you can use the top up to cover it. If the tenant decides not to proceed with the purchase, I believe the agreement says you get to keep the top up amount, but of course up to you and the situation whether you would do that or not. A nice way to have an income, have a pretty much guaranteed tenant for a couple of years and help someone get on the housing ladder. 

[Mark Rocks]

'Rent to buy' does seem like a best of both worlds situation, wherein there's a committed tenant who will definitely take care of the property (as they won't want to destroy their future home), and also gives a tenant a leg up as far as getting on the property ladder.

I wonder if anyone in the forum has ever done this before?