How The Surge Of Tenanted Properties For Sale Is A Massive Opportunity For Investors

How the surge of tenanted properties for sale is a massive opportunity for investors

11.09.2023 By: John Penquet

How the surge of tenanted properties for sale is a massive opportunity for investors

The UK housing market has been experiencing a remarkable recovery since the pandemic, with house prices reaching record highs and demand outstripping supply. However, not all segments of the market are performing equally, and some factors may pose a challenge for the future.

Landlord Sell-off

One of these factors is the increase in the number of tenanted properties on the market, especially in the buy-to-let (BTL) sector. According to data from UPD, the number of properties for sale with tenants in situ has risen by almost 150% in the last 18 months, and by 94% compared to 12 months ago.

Why is this happening? There are several possible reasons, such as landlords wanting to sell their properties before their mortgage interest rates move, or facing financial difficulties due to S24 tax rules. Some landlords may also be looking to cash in on the high prices, or to diversify their portfolio into other types of investments.

Whatever the motivation, the influx of tenanted properties has implications for both buyers and sellers. For buyers, especially first-time buyers or owner-occupiers, it may be even harder to find a suitable property that is vacant and ready to move in. They may also face legal and practical issues when dealing with existing tenants, such as giving notice, arranging viewings, or negotiating contracts. For sellers, especially BTL landlords, it may be harder to attract buyers who are willing to pay a premium for a property that is already generating a lower income than required in the higher interest rate reality of today. They may also have to accept lower offers or longer sales times, as well as paying fees to agents or solicitors.

The SPLIT in the property market

This split has created an unusual scenario.

1 Tenanted properties for sale are depreciating in value and are harder to sell

2 Vacant possession properties are still in a state of under supply and are holding or increasing in value

The impact of tenanted properties on house prices is not clear-cut, but it is likely that it is having a dampening effect on the overall market.

While supply is tighter than 12 months ago, total portal listings have actually decreased by 8% compared to July 2022, the quality of supply has deteriorated, as more properties are occupied by tenants who may not want to leave or cooperate with the sale process. This reduces the pool of potential properties to buy for the general public and increases the upward pressure on house prices, contrary to the rampant punditry we all know is nonsense

This can be seen in the following charts:

Listings on major portals are actually lower than a year ago, meaning availability is tighter and upward pressure on prices continues despite interest rate rises.

Opportunity

So what conclusions can we take from this new phenomenon.

First, the property market is strong for standard sales, with a continued imbalance of supply and demand, with demand still outstripping supply.

Second, tenanted properties are in over supply and therefore being sold below market value. This is a new, and potentially short lived phenomena.

Third, if the supply of properties remains the same overall, a continuation of short supply and steady demand will push up prices later this year and into 2023.

How do I capitalise on this?

You can use technology and data to identify these opportunities. The data used in this analysis is available to anyone – just head to UPD.AI to learn more.

And whilst there, you can set up notifications for tenanted properties coming onto the market, along with other properties matching popular strategies, delivering 1000s of leads both on and off the market every single day. Don’t miss the opportunity.

Remember, successful property investment requires facts rather than opinions. Make sure you have what you need with upd.ai

John Penquet

Market Data Expert

Here we outline how you canadd the senders email address to your safe sender list or ‘whitelist’for the most common email providers.

Outlook Users

Open the email from the sender you would like to add to the safelist. Click on the "Junk" link next to the delete button in the top left corner. Click on “Never Block Sender" in the drop-down options below the ‘Junk’ icon. Their email message will be automatically added to your Outlook safe senders list.

Outlook (Web Version) Users

Once logged in, click on the cog in the top right-hand side of your inbox. Click on “Safe Senders” under the “Mail” tab. Open the email from the sender you would like to add to the safelist. Enter the email address of the sender and click the plus sign. Your sender will be automatically added to your Outlook safe senders list.

Apple Mail

Open the email from the sender you would like to add to the safelist. Click on the sender’s email address at the top of the email. A list of options will appear on a drop down. Click on “Add to Address Book” Your sender will be automatically added to your Apple Mail safe senders list.

Gmail® Users

Open the email from the sender you would like to add to the safelist. Click on the arrow next to an email icon on the far right. Select “Add To Contacts”. You will see the text “Added *Email Address* to contacts.” Appear at the top of the screen, meaning your new contact has been added to your Gmail Safe senders list.

Via an iPhone/iPad

Open the email from the sender you would like to add to the safelist. Tap the sender's name in the “From” line. On the next screen, tap “Create New Contact”. Add the details of the email sender (the email will be populated otherwise you will need to add the sender’s other details, name, address etc) Tap “Done”.

Via an Android Phone

Tap to open the email from the sender you would like to add to the safelist. Tap the icon next to the email address on the left-hand side. Tap “Create contact”. Add the details of the email sender (the email will be populated otherwise you will need to add the sender’s other details, name, address etc). Tap “save”.