A new league table produced by the HomeOwners Alliance showing how long it takes homes to sell on average in different postcodes across England and Wales suggests the average time for a property to go under offer is 61 days.
However, the longest postcode they investigated had an average time of 108 days before going under offer.
It is worth remembering that “under offer” does not mean that the sale is guaranteed. It simply means that the vendor has accepted an offer and the sales process is underway.
A property sale is not guaranteed until buyer and seller have exchanged contracts. Right up until that point the sale can collapse – and often does in around 20% of transactions. If that happens, whole chains can collapse and buyers and sellers have to start back at square one.
If you are thinking of selling a property, then you realistically need to allow an average of 5 to 6 months to see the process through – from putting the property on the market to handing the keys over to the new owner.
For some home-owners, this is just too long a stretch to wait due to their personal circumstances and, if it is a probate sale, it is often a case that the beneficiaries do not want to hold an empty property and are looking for a quick sale.
However, there is another option and that is to rent the property out.
For someone who has inherited a property, this could mean an additional income stream while retaining the asset and benefiting from any capital appreciation over time.
For someone who wants to move, then transferring their existing property onto a Buy to Let mortgage* can release equity to use as a deposit on a new home.
The BTL mortgage would redeem the existing residential mortgage (if there is one) and any excess cash could be used towards the purchase of a new residential property.
It is worth noting that there are some very attractive and competitive buy to let mortgage rates around at the time of writing – many of them available fixed for 2, 5 or 10 years, which allow a landlord to enjoy some positive net cash flow month on month from the rental income and also some certainty as to what the monthly payment will be over an extended time period.
This net cash flow could assist on paying the mortgage on a new residential property, while retaining an asset that could capital appreciate over time. This is an option worth considering for those who are struggling with their pension, or those who want to leave a legacy for their children.
Clearly, buying a second property will incur the 3% stamp duty surcharge, so this must be factored into your acquisition costs.
Understandably, many people do not consider the option of renting out a property that they were originally thinking of selling. This could be for any number of reasons but is often because they don’t want to become a landlord and deal with tenants.
This is where our Guaranteed Rent Service proves to be such an attractive proposition.
It does what it says on the tin.
Northwood will guarantee your rent, even if the property is void, and even if the tenant does not pay.
This means it is the perfect solution for those who never wanted the hassles of being a landlord!
Think of it as a “let and forget” solution where Northwood bears the risk of a void or the tenant not paying the rent.
Rather than selling your property, you can hand it over to your local Northwood office to rent it out and generate an immediate income from it.
Northwood could also help you find your new home, arrange the finance via one of our reputable mortgage broker contacts, and assist the whole process of moving, creating a seamless transition.
For those struggling to sell due to market stagnation, renting the property out for a year could give time for the market to recover, while earning an income from the property. This is a far more attractive option than leaving a property on the market for a long time in our opinion as a property can become “stale” to the market. It can also be a more attractive option that accepting a below market offer.
Additionally, if it is empty, it can incur significant costs such as mortgage payments, council tax, increased insurance, and standing utilities.
An empty property also creates risk from asset theft, vandalism, and can be subject to crime and anti-social behaviour such as fly-tipping, graffiti, and squatting.
Furthermore, renting out your property rather than selling it means you will not incur any estate agent fees, which are typically 2% of the sale price and you will completely avoid all the hassle, stress, and uncertainty that often comes with a house sale. No viewings, no chasing solicitors, no worries.
Your local Northwood office will give you a bespoke Guaranteed Rent for your property, but to manage your expectations, it should be noted that it will be lower than the open market rent to take into account the risk.
Eric Walker, M.D. of Northwood gives some additional insights:
“The offer we make is based upon a number of factors and is totally transparent. We will tell you the market rent and what we will guarantee.
Remember, when comparing our guarantee rent offer, you should take in to account how much the traditional managed agent will charge you in set up fees, inventory, commission etc., plus VAT. We do not charge any commission, we cover void periods, we pay the rent even if the tenant doesn’t and provide legal assistance where required as part of the service.
The typical managed service offered by other agents includes rent collection, but this must not be confused with debt collection. If a tenant does pay, it’s the landlord’s problem and the agent is still entitled to their fee. Additionally, the landlord has to meet the costs of seeking possession whereas under our guaranteed rent scheme, that is our responsibility.
Northwood is part of Belvoir plc and as group we manage in excess of 57,000 properties. Northwood guarantee over 11,000 properties with total rent in excess of £98m each year and have over 87 offices.
Your local Northwood office would be delighted to discuss the service but remember, we can offer a traditional managed service should you prefer”.
Our Guaranteed Rent service recently celebrated its 21st birthday, and provides a solution for many different circumstances. Please contact your local office to find out if it is the right solution for YOU!
* It is recommended to speak to a reputable mortgage broker on obtaining BTL finance and your local Northwood office can direct you to one if required.
Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.
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