Tenant cannot quite raise enough to buy their home?

Tenant cannot quite raise enough to buy their home?

10:20 AM, 12th May 2022, About 2 weeks ago 15

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Hi everyone, We have a very good tenant of nearly 13 years standing.

However, we would now like to sell the house and the tenants would like to buy the property which is their home.

The maximum mortgage they can get is about £40,000 or ca. 25% under the market value of the property.

I have already signalled to the tenants my willingness to give them up to a £10,000 discount.

Does anyone have any ideas about how to bridge a small gap in funding so I can do everything I can to make sure the tenants stay on in their home?

Many thanks

John



Comments

by Paul Shears

10:29 AM, 13th May 2022, About 2 weeks ago

Reply to the comment left by Ann Price at 13/05/2022 - 08:38Well that's interesting. My chartered accountant told me that the tax authorities have no power to determine the value of a property being sold. I have certainly seen a property sold for no more than 66% of it's bottom market value.

by Mick Roberts

17:21 PM, 13th May 2022, About 2 weeks ago

I'll comment cause I too would like idea's if anyone knows anything magic. I've got about 7 tenants that can afford to buy mine & I'm pushing 'em. I'm gonna' pay their deposit, but some are a bit below the 4.5 earnings ratio (which I've heard may be publicly changed to 6x) & some bad credit.

I'd even go Shared ownership route if it means me offloading some & they then take responsibility for repairs & that & I free myself of the Imbecile Council Selective Licensing & the next Govt attack.

by Jessie Jones

7:25 AM, 14th May 2022, About 2 weeks ago

Mick Roberts is quite right, there is some possibility that a change in the rules will allow your tenants to borrow more than 4.5 times their annual income. https://www.theguardian.com/business/2021/dec/13/bank-of-england-plans-to-remove-interest-rate-check-for-mortgages

by Judith Wordsworth

12:51 PM, 14th May 2022, About 2 weeks ago

Reply to the comment left by Jessie Jones at 14/05/2022 - 07:25
6 x income for a mortgage will see a rise in repossessions especially as interest rates are rising. People have to pay bills,eat, and possibly have a life. But then there is an incentive for lenders as unlike in the 1980’s people in negative equity or in financial trouble could just hand over the keys and walk away. But no longer as liable for any shortfall that the lender sells the property for until the debt is repaid.

by charles stevens

6:44 AM, 27th May 2022, About A day ago

It depends how generous you are feeling. You could lend the shortfall to the tenant? It is unliklely that the mortgage company would agree to you having a second charge but you could have an equitable charge supported by a restriction.

You could then agree a repayment structure. The tenant should report this to their mortgage company but they woudnt be the first people not to tell the mortgage company everything.


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