Residential mortgage, but tenants in situ

gcpbuyer

I was just searching the forum there and read some eye opening threads.

I bid on a property, and I'm currently awaiting an offer for a residential mortgage from a lender. 

Solicitors fees paid, survey done etc (seems like I shouldn't have went ahead with that judging by these forums). However, the flat has tenants in situ. So I won't be able to buy the property until they have left. 

They estate agent seems to think he can serve 2-months notice tomorrow, and it will be all wrapped up before the stamp duty deadline on 30th of June. 

However, I've read that it's now 6-months due to Covid. 

Any ideas on how I should play this?
Should I change to a buy-to-let mortgage or is it too late? Will it affect the rate I get etc.?

I'm pretty confused

MaryNB

There are a lot of additional requirements that apply to BTL (usually 25% deposit and already a homeowner). It won't just affect the rate, it will be a completely different product.

Notice in England, Scotland and Wales is currently 6 months. If the landlord wants the tenants out before then he/she is going to probably have to try a cash incentive or hope they decide to find somewhere rather than waiting for the 6 months to end. If they don't want to leave at all (or are waiting on council housing) they can stay past the notice period. They're not legally obliged to leave until the landlord applies to the court for an eviction order and the court grants the order. 

ETA: it's up to you how to play it. How long are you willing to wait? It's unlikely you'll meet the June SDLT deadline with this property or if you start afresh on a new property. Some people get lucky and the tenants leave before the end of the notice. Some find that the tenants are waiting for council housing and will therefore have to stay until the eviction order is served by the court and the bailiffs turn up. 

ratechaser

In all honesty, any tenant in that situation with half a brain knows what's going on and can make their demands accordingly if they are prepared to vacate early to help a sale complete ahead of the deadline...

Slithery

Are you planning to start a residential lettings business?

[Deleted User]

gcpbuyer said:

I was just searching the forum there and read some eye opening threads.

I bid on a property, and I'm currently awaiting an offer for a residential mortgage from a lender. 

Solicitors fees paid, survey done etc (seems like I shouldn't have went ahead with that judging by these forums). However, the flat has tenants in situ. So I won't be able to buy the property until they have left. 

They estate agent seems to think he can serve 2-months notice tomorrow, and it will be all wrapped up before the stamp duty deadline on 30th of June. 

However, I've read that it's now 6-months due to Covid. 

Any ideas on how I should play this?
Should I change to a buy-to-let mortgage or is it too late? Will it affect the rate I get etc.?

I'm pretty confused

The estate agent is either spinning you a line or is completely ignorant on how tenants can be legally evicted.

How I would play it would be to do one of the following:

1. Walk away and find another property without tenants in-situ

2. Ask my solicitor to cease all work until the tenants have left the building.  Your mortgage offer could easily expire before the tenants are out.

3. Keep my offer on the table along with solicitor ceasing all work and start looking at other properties.

What I would not do is bend over backwards and start incurring more costs by getting a BTL mortgage because the vendor is not proceedable.   

gcpbuyer

This is actually pretty crazy. 

Just checked back through my emails: early in March, I asked them what the situation was with the tenants, and they said they would issue notice once the valuation was booked. 

So I applied for a residential mortgage with this information. 

But they obviously haven't issued the notice 

gcpbuyer

MaryNB said:

There are a lot of additional requirements that apply to BTL (usually 25% deposit and already a homeowner). It won't just affect the rate, it will be a completely different product.

Notice in England, Scotland and Wales is currently 6 months. If the landlord wants the tenants out before then he/she is going to probably have to try a cash incentive or hope they decide to find somewhere rather than waiting for the 6 months to end. If they don't want to leave at all (or are waiting on council housing) they can stay past the notice period. They're not legally obliged to leave until the landlord applies to the court for an eviction order and the court grants the order. 

ETA: it's up to you how to play it. How long are you willing to wait? It's unlikely you'll meet the June SDLT deadline with this property or if you start afresh on a new property. Some people get lucky and the tenants leave before the end of the notice. Some find that the tenants are waiting for council housing and will therefore have to stay until the eviction order is served by the court and the bailiffs turn up. 

Yeah, and to top it all off, notice is currently 6 months due to Covid

secla

even if you got a btl mortgage and purchased the property with the tenants in situ you would then have to evict them yourself which could take anywhere up to 18 months depending on how stubborn they were feeling.

gcpbuyer

What were the estate agents playing at telling me 2 months notice, when surely they knew it was 6!

And lying/or mis-communicating about when they would issue notice. What a waste of time

[Deleted User]

gcpbuyer said:

What were the estate agents playing at telling me 2 months notice, when surely they knew it was 6!

And lying/or mis-communicating about when they would issue notice. What a waste of time

Could be ignorance.  There has been talk of the Section 21 notice period going back to 2 months at the start of June as the current notice extension is due to end 31st May but it has been extended before but even so a Section 21 on its own does not end a tenancy so it's still a wildly optimistic assumption on the estate agents part.

nimbo

They could feel the tenants are expecting to be moving and feel they won’t put up a fight. 

Yes it’s a ball ache for them - but many tenants will move when given notice and will want a good reference. They may already be looking.