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Buy House From Landlord
Charlie Connolly explains how it works when you buy a rented house from your landlord.
What happens if my landlord decides to sell? Can I buy my rental house from my landlord?
Yes, there are schemes now where you can buy off your landlord if he chooses to sell. Some schemes now even allow you to do this without a deposit.
Can I ask my landlord to sell me the house?
Yes, of course you can ask your landlord to sell a property to you. You would have to do this directly, and they have no obligation to sell to you. After all, it is their house.
However, it could be quite convenient for them – they will save on estate agent fees as the sale would complete without an agent.
What is the process of buying a rented house from a landlord in the UK? How does it all work?
If you were to buy a rented house from a landlord, firstly, a purchase price would need to be agreed. You would have to make your landlord an offer with a fair market price for what you think the home is worth.
Can a landlord just sell the house you’re renting? What are my tenants rights if my landlord wants to sell?
A landlord is able to sell the house you are currently renting, but they are required to give you notice. This is typically 60 days.
It’s probably best looking at your rental agreement to see what was agreed when you first rented the property out.
Can you evict a tenant in situ when buying a house?
Yes, you can evict a sitting tenant, but the process depends on the type of tenancy and the legal protections in place for that tenant.
How much notice must a landlord give a tenant when selling a property?
It’s typically 60 days, but it can be more or less depending on the terms of the agreement. Most rental agreements have a provision that says how much notice landlords must give tenants if the property is being sold, and when the agreement will come to an end.
Can I buy a house from my landlord without a deposit? Is this possible?
Yes, so some lenders will allow you to purchase a property without a deposit. With some schemes you can purchase with ‘gifted equity’, which means no monetary contribution would be needed.
What are the costs of buying my rental property?
One cost you would need to consider when buying your rental property could be your deposit. We’ve just spoken about not needing a deposit, but in some cases you may have to put down a deposit to proceed.
You’d also have conveyancer fees – you would need to instruct a solicitor to complete this.
There are also survey fees. You may opt to upgrade to a more in-depth survey, like a Level Two Homebuyer’s Report or a Level Three Building Survey.
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What is a leaseholder?
A leaseholder is someone who owns a property on a lease, and these typically run for 99, 125 or even 999 years. The length of the lease decreases year by year until it eventually runs out.
Typically, when you purchase a flat it would be leasehold, while most houses are normally freehold. This is a question you should ask before agreeing to purchase a property.
Can I apply to buy if I have rent arrears?
Yes, you can still apply, but it may raise concerns with a lender. If you are currently in rental arrears, they are likely to want a legitimate reason for how those have arisen.
Do I have to complete the purchase within a specified time?
No, there isn’t a specific timeframe when you purchase from a landlord. A typical purchase transaction can take around three to four months.
Mortgage offers typically last for six months, so providing you can complete within that six-month period while your mortgage offer is valid, I can’t see there being an issue.
What happens if my landlord delays the sale?
If your landlord delays your sale, you’ll have to wait until they are ready to complete, as all parties must agree to a sale and purchase date.
What if I want to remortgage? How does it work here?
Once you’ve purchased a property, you’re able to remortgage as standard. It would be just like a standard remortgage on any other property.
What are the advantages of buying your rental property?
There could be no competition, and so you may get a better deal – especially if you’ve got a good relationship with your landlord.
You may have already made improvements to the property, in which case you haven’t lost any money in that respect. You also avoid moving furniture to another property, and you may already know your neighbours and the local area.
You’ve demonstrated how a mortgage broker can help, but have you got anything else to add?
I just want to reiterate that we’ve got vast experience in helping people purchase mortgages from their landlords. We’ll be able to guide you as best as we can along the way.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.