Increased value of using professional agents
The same as now, it will be possible to sell a property with its current tenants to a new landlord or investor once the Bill becomes law, however, the rules surrounding repossession of the property will change, for both new and existing tenancies, meaning that the new owners will have to adhere to the new standards for serving notice if they later decide to repossess the property. Potential investors may view the changes as reducing the flexibility and profitability of buy-to-let properties, which could lead to lower demand and put downward pressure on prices.
Sales agents can showcase their value by providing clear guidance and utilising local expertise and market knowledge to market properties effectively. Propertymark agents are well-equipped to support investors in managing tenant relationships and compliance issues, and investors can offload much of the regulatory burden by choosing to work with a professional agent.
Sales Protocol Toolkit
The toolkit offers huge potential to speed up transactions, reduce fall-through rates and comply with Consumer Protection Regulations.
Key changes to be aware of
Once the changes become law, tenants will be entitled to a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict them to move in or sell the property.
If ownership changes during this time, the new landlord must honour the rest of the maining initial 12-month period before they can serve notice to move into the property themselves or resell. Once the 12 months have ended, 4 months’ notice can be served on these grounds.
Buy-to-let investors must also be made aware that the new periodic tenancies will give tenants the right to end the tenancy at any time by giving two months’ notice.
Material information
The marketing of a property should let potential buyers know that the tenants will remain, and once the sale is completed, they will start making their rental payments to the new buyer.
Buy-to-let listings are likely to attract a smaller pool of potential buyers, although tenants in-situ can be an attractive selling point as the property offers a guaranteed rental income immediately. It also means that the property won’t be empty during the conveyancing process, protecting the rental yield from a lengthy void period.
Things to check before accepting an instruction
The relationship between sellers and tenants will be an important factor in agreeing on a sale, so find out as much as possible and address any disagreements early on to avoid issues later in the process.
Ensure that the landlord has a current and signed tenancy agreement and that all prescribed documents were served correctly at the start of the tenancy. This will include a valid gas safety certificate, an electrical safety certificate and an energy performance certificate. They must also demonstrate that any deposit was registered with a government-approved scheme. This will be important to reassure potential buyers that the tenancy has been properly set up and reduce the risk of problems once they’ve taken over as landlords.
Propertymark supporting agents adapt
We will keep property agents abreast of potential amendments and issues as the Renters’ Rights Bill progresses through the Committee stages, the Third Reading and then to the House of Lords via webinars. Follow our social channels to be kept up to date too.
Renters' Rights Bill
The Renters’ Rights Bill was introduced to the UK Parliament on 11 September 2024, will ban Section 21 evictions, and introduce a new tenancy regime and new requirements for property standards and rent increases.
