Selling a house that's currently rented out

propertyrental

3years was the maximum, not the agreed period.
The reason for 12 monthly renewal was so that the lender could review and decide whether to extend CTL for another 12 months. Either your circumstances, the economy generally, or their policies might change - hence the review.

You could speak to local letting agents and see if they can find a landlord interested in buying from you and keeping the tenancy in place. You'll get a lower sale price than on the open market with vacant possession, but your family get to stay where they are.

Marketing for a 'vacant possession' sale with the tenants in place will present difficulties. Many buyers will be wary of paying out for surveys, legals etc with the risk that the tenants refuse to move out.

And the tenants themselves could cause difficulties: refuse access for estate agents, viewings, surveyor etc. or pointing out all the negatives of the property during viewings....

You may have no option but to serve  s21 and start eviction proceedings. I trust the tenancy is kosher and a S21 would be valid....

S21 checklist (Is a S21 valid?)

theartfullodger

Selling a property does not end a tenancy nor compel tenant to leave.  New owner becomes new landlord (even if outside with a big removal van and 3 screaming kids, plus deranged hubbie..).  

I bought a house, 4 tenants , no problem.

gazfocus

MattMattMattUK said:

gazfocus said:

MattMattMattUK said:

gazfocus said:
Mortgage lender have moved the goalposts. They originally said we could get consent to let for a maximum of 3 years but said we had to renew consent every 12 months. They gave us consent for one year, then refused to renew the consent after the first 12 months.

That is not them moving the goalposts, they said a maximum of three years, not guaranteed for three years. 

Agree but at the same time, the mortgage lender made it sound as though renewing it every 12 months was a mere formality. Even the page on their website doesn't say anything to suggest otherwise, but yes, it was perhaps naive of me to assume the 3 years was a given.

The three years was never a given, even less so based on the current mortgage market. Also and this is where things could get really sticky as this clause is often included in BTL mortgages and may be in the consent to let, does the consent include a specific provision that the property may not be rented to family members?

gazfocus said:

Sea_Shell said:

Thanks for that.

If the original plan was a BTL mortgage in 3 years, why can't you do that now? 

What will be different in another 2 years?

Main reason is my wife's credit report. She has 2 CCJ's on her report that will fall off in 2 years time. Having spoke to a mortgage advisor on Friday, they think we'll have a difficult time getting a BTL mortgage unless we can stump up around 50% deposit which we can't.

Are the CCJs satisfied and how much equity is in the property as a percentage? There are mortgage advisers on the mortgage board on this site who specialise in those with adverse credit, I am not sure if that extends to BTL but in theory a satisfied CCJ from five years ago should be manageable, though it may depend on lenders current appetite for risk based on their predictions of a drop in property values. Where are you currently living, in a rented property or in another property you own?

I don't recall there being any provision in the consent to let for the house not being rented to a family member (we were conscious about doing everything by the book), but I'll admit I've not looked into the terms of BTL mortgages yet as we're not in a position to get one. 

Re the CCJ's, they're not satisfied but I could get a loan to satisfy them (they're about £7k combined), but I think me then getting a loan so soon before applying for a BTL could cause different issues from the conversation I've had with the mortgage advisor that we've used whenever we've bought. 

We currently live in a rented property.

Sea_Shell

Out of interest how (why) did you acquire the rented out house?

Part Inherited?   

gazfocus

Sea_Shell said:

Out of interest how (why) did you acquire the rented out house?

Part Inherited?   

Why we started renting it out is a bit of a long winded story but we bought the house to live in 9 years ago. Moved out 15 months ago and rented it to this particular family member. 

Annisele

How is your tenant related to you? Standard BTLs usually don't allow you to let to your spouse (or partner even if unmarried), sibling, child, grandchild, parent, or grandparent. Letting to very close relations like that usually requires a regulated BTL, which tend to come along with stricter lending criteria. Tenants who are more distant relatives, like aunts or nephews or cousins, will usually be OK with a standard BTL.

Presumably your tenant isn't in a position to buy it themselves?

RAS

Part of difficulty with your longer term plans would be that the expectation is often that the rent on a BTL mortgage covers 125% of your mortgage.

Appreciate that you have consent to let, but is that the case? If not, your relative would  have been in for a shock when you tried to get the BTL mortgage.

dimbo61

You need to explain to your Tenant and serve notice to evict Section 21 ASAP.
Get the property on the market to sell.

SiliconChip

I presume that your relative is not in a position to buy the house themselves? If not then perhaps the simplest solution would be for you to help them find a new private rental to move into as soon as possible and bypass the S21/eviction route entirely.

Boat_to_Bolivia

SiliconChip said:

I presume that your relative is not in a position to buy the house themselves? If not then perhaps the simplest solution would be for you to help them find a new private rental to move into as soon as possible and bypass the S21/eviction route entirely.

I agree with this. Help them find somewhere else as soon as possible, then market at a price for a quick sale, in order to appease the mortgage provider.