Would you sell to a tenant under shared ownership?

For sale sign outside a house as landlords exit rental market amid tax concerns

by Readers Question

9:58 AM, 15th December 2023, 2 years ago 16

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Landlord News Landlords Questions Lettings & Management

Hello, Our tenant of nearly 2 years has asked if we’d consider selling to them under shared ownership. The AST ends in May ’24.

The split would be 51/49 in our favour and they would continue to live in the house and pay rent pro rata.

I’m aware of a Gov.uk document that gives guidance for mainly housing associations type accommodation and their shared ownership schemes – but not private landlords.

Has anyone ever done this with their private tenants?

If so, would you share your experiences, pros and cons?

Thank you,

Stephen

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Tags: Accidental landlords, landlord, shared ownership, tenant buying property

Comments

DPT

Member Since October 2020 - Comments: 1186

4:24 PM, 15th December 2023, About 2 years ago

I don’t think you’d be able to evict them if they stopped paying the rent as they would be joint owners.

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Darren Peters

Member Since January 2016 - Comments: 473

5:04 PM, 15th December 2023, About 2 years ago

You would be stuck with an asset that would be unsellable going forward. If the tenant is unable or unwilling to buy your share nobody else will touch it and your money will be trapped

You won’t be able to raise finance against your 51%.

The tenant will dictate when you get to exit the deal by buying you out at their convenience not yours.

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Michael Booth

Member Since September 2023 - Comments: 335

7:28 PM, 15th December 2023, About 2 years ago

Simple answer NO THANKS

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Simon M

Member Since September 2014 - Comments: 166

8:48 PM, 15th December 2023, About 2 years ago

Reply to the comment left by David at 15/12/2023 – 16:24
There must be a way to solve this in property/housing law because housing associations can do it – but there will be other problems where it’s not the same.

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DPT

Member Since October 2020 - Comments: 1186

1:53 PM, 16th December 2023, About 2 years ago

Reply to the comment left by Simon M at 15/12/2023 – 20:48Housing Associations have more rights, partly because they are using FCA regulated shared ownership schemes.

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Michael Crofts

Member Since December 2022 - Comments: 82

6:37 PM, 16th December 2023, About 2 years ago

Hi Stephen,

I tried to look at shared ownership for one of our investment properties. Unfortunately I could not find anyone with actual real-world experience of doing this either on landlord forums or at solicitors. All I got was theoretical info from people who couldn’t convince me they knew what they were talking about. If you learn anything about this I’d be grateful if you will share it, you can contact me by looking at perrygrovefarm dot co dot uk

Michael

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