Buying house with a sitting tenant

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    Buying house with a sitting tenant

    Hi

    I recently bought my own home as a FTBer.

    My mother lives alone in a rental property, but she is on a pre-1980 whatever-it-was contract whereby she is secured and basically lives in the house as if it's her own for the last 40 years.

    I'm led to believe the house is worth a lot less with her there as a sitting tenant than it would be otherwise, so I am considering buying the house and letting it to my mother.

    Is this normal practice, and if so, how would I go about it?

    I understand the concept behind BTL mortgages, the extra deposit typically required, but wouldn't know how to go about getting an accurate valuation done taking the tenancy situation into account. Are there companies that specialize in such a thing or should I just go to a local estate agent?

    If the current owner chose to sell, would they have to do so at the property's market value with a sitting tenant, or could they just name their own price? I was led to believe that, much as there is a 3rd party who enforces inflation-linked rent increases (i.e. the owner can't simply charge what he wants), that there are also laws saying that he has to offer the house at it's market value in the eyes of an independant surveyor.

    thanks for any advice!

    #2
    The owner can offer the house at whatever price he/she wants....why do you think otherwise?

    If I want to offer a two bed flat in Birmingham for £5 million, no-one can force me to sell it at 'market value' since it is mine to sell and not yours to buy.

    If I owned the property, I wouldn't accept your argument of a depressed market value due to having a regulated tenancy, since a family member is buying the house. I would know that the house would be worth full market value to you, since you are going to scrap the regulated tenancy at your choosing in the future.

    If you were a third party investor then your argument would stand since you would have no ability to change the house from being under a regulated tenancy, but as a family member...I'd tell you try again.
    I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

    That also means I cannot share in any profits from any decisions made!

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      #3
      Appreciate your points about the owner being able to ask what they want for the house, but surely any mortgage lender would value the house at it's value with a sitting tenant, regardless of who the purchaser is

      So, if a cash buyer comes along then you may have a point, but if he sells it to someone needing a mortgage, whether that's me, you or anyone else for that matter, then he surely he has to sell it at it's value with a sitting tenant because otherwise it's un-mortgagable?

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        #4
        Where the purchaser gets his money from, and what a mortgage company are willing to lend against the property have no bearing on the selling price.

        Take Phlash's £5m flat in Birmingham. No lender would value it at that, but Phlash still has the right to say he won't sell it for less.

        I guess the key point is that the vendor doesn't have to sell it (at any price)

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