How Can I Sell My Rental Property Fast?

As house prices hit record highs in 2021, many landlords decided to sell up and enjoy substantial capital gains. And more may follow suit in 2022.

While rent inflation has increased at the fastest rate in 13 years — surely a win for property investors? — the market will eventually slow, and several regulatory changes are afoot that will make it harder for landlords to profit from their buy-to-let portfolio.

If you want to sell rental property this year, how can you do this as fast as possible?

Should I Sell My Rental Property in 2022?

According to recent figures from Halifax, property prices are almost £34,000 higher than before the pandemic began. In 2021, the Office for National Statistics (ONS) reported a 10.2% price inflation over the year. Hundreds of landlords have seized the opportunity to sell up or release equity from their buy-to-let properties while prices are at their highest in years.

Buyer demand remains high in the first quarter of 2022, but the number of homes for sale is dwindling, which will force the market to slow. Prices may continue to climb, but this will be in a much more gradual, subdued fashion than we have seen in the last 18 months.  

While the supply-demand imbalance may negatively impact house-sale prices, it also means that rents are at a record high. At the end of 2021, the average UK rent was £1,061, up 7.5% on the same period in 2020. Whether this trend will continue in 2022 will depend largely on COVID-19 and how it affects demand for rental properties. 

Aside from an unpredictable housing market, mortgage rates are on the rise, and there are several changes in government regulations that could significantly diminish the profitability of buy-to-let properties.

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New Landlord Rules in 2022 and Beyond

  • Landlords based outside the UK will face a 2% stamp duty surcharge from April 1. This is in addition to the existing 3% surcharge for anyone buying a second property in the UK. So, if you already own a property anywhere in the world, you will be subject to a 5% stamp duty surcharge on any BTL properties you buy in the UK.
  • The government is expected to increase the Energy Performance Certificate (EPC) requirement for landlords in a bid to achieve its net-zero carbon emissions target by 2050. Currently, landlords need to provide an EPC with a rating of at least E and conduct gas-safety checks annually. All new tenancies must have a valid Electrical Installation Condition Report (EICR), and as of April this year, the rule will apply to existing tenancies too. A new EICR is required every five years. Failure to comply will result in fines of up to £5,000 for a first offence and up to £30,000 for all subsequent offences.Planned updates to the regulations will require rental properties to achieve a C rating for new tenancies by 2025 and existing ones by 2028. The cost of bumping an E-rated property to a C rating will typically be more than £17,000.
  • The Renters’ Reform Bill (England) is likely to be amended in 2022, with changes shifting the balance of power regarding evictions from landlords to tenants. If the proposed changes become enshrined in law, landlords will no longer be able to end rolling tenancies with only two months’ notice and no reason for doing so, as is currently the case. Some landlords may prefer to leave the private rental sector than face the possibility of being stuck with sitting tenants who are not paying rent. 
  • The Model Tenancy Agreement, launched by the government in January 2021, means landlords can no longer issue a blanket ban on tenants having pets. This is something to consider as resident pets could lead to higher maintenance bills.
  • A new requirement to install carbon monoxide alarms in all rented accommodation was introduced in November 2021. Landlords must also bear the cost of repairing or replacing smoke and carbon monoxide alarms if they are faulty.The regulations around rental properties in England and Wales grow each year. There is a particular focus on making properties “greener”. All of which means more hassle and expense for buy-to-let investors.

Had enough of all the red tape surrounding being a landlord? Want to sell your rental property fast? Contact us for a free property valuation and cash offer today.

Tax on Selling Rental Property

Capital gains tax (GCT) is due on any profit you make from selling or disposing of an asset — such as property — that has increased in value. If your rental property has increased in value since you bought it, you may have to pay CGT when you sell it.

Speak to a solicitor or conveyancer with expertise in buy-to-let properties to find out if CGT is due and, if so, how much you need to pay. The rate at which you will pay CGT on the property depends on your taxable income. A basic-rate taxpayer will pay 18%, whereas higher rate taxpayers — those with an income of more than £50,001 — will pay 28%.

If you are selling your main residence, you will probably qualify for Private Residence Relief, and no CGT will be due. If the property was your main residence for a period, but you also rented it out for some time, you will pay CGT only for the period when the property was rented out.

Read our blog, “What Are the Taxes on Selling a House?” for more information about paying capital gains tax on property.

Selling a Rental Property in the UK

  • Communicate with Tenants in Situ

If there are tenants living in the property when you decide to sell, give them plenty of notice about your intentions and keep the lines of communication open. Renters have the right to refuse access to the property for estate-agent visits or viewings, so having them on side will help keep the sales process moving. Some landlords incentivise existing tenants to tidy up before viewings and accommodate potential buyers’ preferred viewing times by offering the last month’s rent-free.

  • Carry Out Repairs and Improvements

As with selling a private residential home, the appearance and upkeep of a rental property will affect how long it takes to sell. In particular, a property’s “kerb appeal”, that is, how it looks from the outside, can make the difference between making and losing a sale. First impressions count! This is another reason to maintain a positive relationship with any tenants in situ. If you need to access the property to carry out repairs or update the decor, your tenants must agree on a time when tradespeople can enter the property to carry out the necessary works.

  • Research the Market

What are renters looking for in properties in the current market? Open-plan living? A lovely garden? A home office? If your rental property has any of these features, make the most of them. Tidy up a messy garden and add popular features such as fencing to provide privacy. Create an office space and make sure there are plenty of conveniently-situated power sockets. It’s worth speaking with local estate agents to find out what’s top of renters’ wish lists.

  • Consider Selling at Auction

Selling via a traditional or modern auction is generally quicker than an on-market sale with an estate agent. The average time it takes to sell a house via the traditional route is around four months, whereas selling at auction takes just 28 to 56 days. However, there is no guarantee your property will sell and auction house fees can be high. You may not get these back if your property doesn’t sell.

  • Sell to a Cash House Buying Company

Selling to a genuine cash house buying company is the only way to secure a guaranteed sale fast. House Buyer Bureau has the funds to buy any property in the UK in as little as seven days. We buy all types of property, regardless of their condition. We will work to a timescale that suits you, so if you need a little more time, for example, to allow tenants to move out — no problem!

Whether you’re eager to escape the buy-to-let business before more regulations come in, or you want to gradually wind down your property portfolio, we can help. Take two minutes to fill in our short online form, and one of our expert cash house buyers will be in touch to gather a few details about your property, discuss your needs and make a cash offer.

Chris

Chris is Managing Director of HBB and has worked in property all his professional career. He has extensive experience in the property buying market and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

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