Sitting tenants don’t tend to be as prevalent any more but they still exist to a fair degree and this is where different sales strategies need to be applied – swiftcapital.co.uk being one.
Many protected tenancies used to go to auction due to the fact that a house with a sitting tenant wasn’t always considered a great prospect for the buyer. The tenant’s rent is capped at a fair rate and so the landlord can’t so easily extrapolate extra value after the purchase of the house due to the Maximum Fair Rents Order.
The Rent Valuation Office predefines what rent is due and the sitting tenant is often effectively sold with the house, although sometimes they may be bought out.
There is a range of protected tenancies with names such as ASTs, Regulated tenancies, Assured Tenancies, Rent Act protected tenancies and agricultural or life tenancies. Some tenants may have been in place since before 1989 and are therefore protected by the Rent Act 1977.
If a buyer with a limited portfolio looks to buy a house with a sitting tenant, they may not see the market value of the house as being anywhere near the value they can extrapolate from rent. For example, in London there used to be a lot of sitting tenants where the value of the house was extortionate and the rent was minimal due to the housing boom and occupancy before 1989 lasting to recent times.
There are a few main themes in selling a house to which we all must abide though. We must consider things like timing, agent’s fees, and how to extract the best value in the quickest time.
