The top risks and costs of empty landlord properties
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.
“Under offer” means that an offer has been accepted and the legal process of transferring ownership has started.
This typically takes around three months, depending on how many people are in the chain and if bank finance is being used.
So, it is reasonable to suggest that an average property might be in the sales process for around 5 months in the UK.
We thought it might be helpful to list some of the costs and risks of an empty property:
- Mortgage (if you have one)
- Council tax
- Standing utilities
- Insurance - many insurance premiums increase if a property is empty for more than 30 days.
- Security - depending on the area, the property may need to be boarded up. You will also need to visit the property on a fairly regular basis to check up on it, clear up post, and check for maintenance and there is both a time and travel cost associated with this, or you may need to pay a local agent.
- Maintenance - on-going repairs and maintenance to ensure the property does not deteriorate.
Additionally, empty properties can attract issues such as asset theft, vandalism, fly-tipping, and increasingly, being used for fraudulent transactions.
Property fraud is increasingly common in void rental properties. There have been a number of high profile cases where fraudsters have assumed the identity of the landlord and then been able to sell the property and disappear with the proceeds.
So, as a general rule, an empty property becomes a much higher risk than an occupied or tenanted property.
If the property is a rental property, then the landlord will be paying all the costs listed above, but without rent coming in.
This can cause a great deal of emotional stress, as a property transaction is not guaranteed until exchange, so there is always the danger that the buyer may drop out. A protracted sale may put a landlord into financial difficulty, which could make it difficult to get finance in the future.
If the sale collapses (and there are numerous reasons why this occurs), the seller is back to square one with marketing, viewings, etc. and the clock on the sale is re-set to zero.
This is why it is important that landlords weigh up all the costs when deciding which sales channel to adopt.
Selling through a traditional agent will incur fees of typically 2% plus VAT of the sale price and legal fees can be anything from £750.00 to £2,000.00, depending on whether the property is freehold or leasehold and/or the complexity of the sale.
When taking all of the above into account, our proposition starts to look increasingly attractive and also reduces risk.
We will make a no-obligation offer on your empty property within 48 hours of you getting in touch.
We have a substantial cash fund standing by (which can be verified via a solicitor’s letter) and we can work to your timeframe - completing in as little as 7 days if that is what is required.
If you are struggling with debts or mortgage arrears, it may be possible to make an advance payment to you to clear these debts, and get you on a more even footing before the sale is completed.
We are a family-run business with a 30 year track record of professional property buying. We will typically offer you 80% to 85% of the market value of your property but there are no estate agent fees, we pay your legal fees, and there are no worries about the costs of running an empty property.
So when you weigh up the costs and put a price on your peace of mind, then you may find that our offer to buy your empty property quickly is the right solution for you.
You have nothing to lose by getting in touch with us, discussing your situation, and seeing if we can provide a solution that works for you.