Hi there
What yield are investors looking for currently? I have a property worth £230k in Southampton that I would like to sell.
Thanks
Rachel
Are you hoping to sell with a tenant in situ?
I want to know if that would be worthwhile or if I’m better off waiting for the tenancy to end (May 2027)
I would wait, not many investors are buying and the few that are are likely to prefer to find their own tenant so your buyer pool is likely to be very small.
You could offer it to your tenants if you think they may be interested.
In terms of yield if i was buying (i’m not) i would want a minimum of 5% yield of purchase costs(including stamp duty etc) after allowing for expected regular maintenace costs, insurance, service charges. So if you want £230k i would say rent would need to be around £1300 pm as a minimum.
That is not the date the tenancy will end. The tenancy will end when the tenant gives you the keys back. You have no idea of knowing when that is at this stage.
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It’s only March 2026 now. What length of fixed term did you agree to, for the tenancy not to be running out until May 2027?
As this is clearly in excessive of 12 months, when the RRA comes in could the landlord issue a section 8 for sales purposes even though the original fixed term has not ran out, because the RRA invalidates fixed term contracts? Assuming of course the fixed rate has ran at least 12 months.
Presumably if the RRA invalidates fixed term conditions to the benefit of the tenant, could this time it benefit the landlord?
I agreed to 2 years from last May.
I could but I don’t want to risk having to leave the property empty for 12 months if a sale falls through (new RRA rules)
It’s a Section 1a for sale of the property.
If you want to maximise your returns and sell with vacant possession, you’d have to a) wait 12 months for the protection period to expire and then b) give 4 months’ notice to the tenant . If you get lucky and the tenant adheres to that notice period, the earliest you could complete a sale of an empty property will be September 2027.
If anyone has the answer to these questions I’d be grateful so I can work out if it’s worth risking the 12 month rule:
When it states you can’t rent for 12 months if a sale falls through, when does that 12 months start?
Is it from tenant leaving?
Offer being accepted?
Notice of withdrawal of offer?
Also if you accept an offer and serve notice, can this clause be retrospectively applied?
Is not giving notice the same as not renewing the tenancy?
Because then I can put it on the open market around Nov / Dec this year, giving enough time for the sale to go through and letting the tenants move out when their 2 year tenancy expires.
Its 12 months from the end of your section 8 notice.
Under RRA the tenancy will not have an end date so those dates wont work and you’d need to give tenants notice you wish to sell. This will be 4 months.
The 12 month protection period applies to new tenancies, not existing ones pre RRA so you wouldnt be impacted by this.
I’ve got two law websites that say the 12 month protection applies to existing tenancies. I went back and checked and found two others that say it doesn’t. The gov documentation simply says “Tenants will benefit from a 12-month protected period at the beginning of a tenancy” so I think that implies it won’t apply to existing tenancies. @Richard19 Do you have anything stronger to confirm this?
And it’s def Section 1a for sale. S8 is for rent arrears… same as now.
No, and this reveals that it would be very helpful for you to become a member of a LL association even just for the benefit of their helpline. From May, there will be no such thing as “renewing the tenancy”.
I’m basing it on government website as well as various other websites. If it applied to all existing tenancies no one could sell for a year, effectively 16 months which would be crazy…
Its definitely section 8. It is GROUND 1A under S8…
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which would be par for the course for this govt.
Ah yes, I see I was getting my grounds and sections mixed up! Thanks for pointing that out.
So even if the 2 year tenancy comes to an end in May 2027, and I want to sell my house, and it doesn’t sell for whatever reason, I would still have to wait 12 months before getting another tenant?
I don’t want to renew the tenancy, I want to sell. I had 2 sales fall through last year, so I had to get a tenant in again and wait so I can try again either this year or next.
There is no “2 year tenancy” after this May. If you want to sell your house from this May, you give the tenants 4 months’ notice in May 2026 and they leave (you hope… otherwise you go to court and get bailiffs in). If it doesn’t sell, you have to wait 12 months.
There are no renewals anymore after this May. Your tenants can stay there perpetually.
Property always sells. It just doesn’t always sell at the price the seller wants.
So there is no reason for me to wait til the end of this year to put it on the market? Ie the same rule applies come May 2027? ie I will have to formally give them notice to leave? It just doesn’t make any sense!!
May 2027 no longer has any relevance for you.
What I “think” you may be able to do is serve s8 notice in may 26 with 4 months notice but tell tenants you will not enforce it until a later date, you have 12 months to apply to court. The 12 month restriction on renting will apply from expiry of the s8, so until september 2027. If tenants leave in may 27 as originally envisaged you would then be able to let out from sept 27 if it doesnt sell.
Is this right? I thought the ban would run for 12month following possession being regained.