Investors are buying up tenanted properties at auction in increasing numbers as the impact of the Renters’ Rights Act hits the industry.

There was a 70% jump in rental homes with sitting tenants being sold under the hammer last month, Auction House has revealed.

Figures from the auctioneer show 46 tenanted rentals sold in April compared with 27 in the same month last year, the Daily Telegraph reports.

Quick exit

Philippa Martinez, National Sales Manager at Auction House, told the Telegraph accidental or part-time landlords want a quick exit from the market, and properties with tenants were selling at a discount of 30% to 40%.

She said: “It is a good time for those larger landlords that run their properties like a business, are experienced in what they’re doing and are unfazed by the new reforms, to snap up a deal and add to their portfolios.

You’ve got this knee-jerk reaction and the big landlords have swooped in.”

“You’ve got this knee-jerk reaction [from small landlords] and the big landlords have swooped in.”

Not afraid

And David Coughlin, Chief Executive at Landlord Sales Agency, said more than 50% of its sales in the past few weeks had been to landlords with 10 to 15 properties.

He said: “They’re not massive landlords with 1,000 properties. They’re hungry buyers who have been in the market for a while and are set up with limited companies. They’re just keen to buy and they’re not afraid of the reforms.

“The ones leaving are either between 60 and 70 years old and just want to retire, or they’re worried about fines and the finances don’t stack up for them any more.”

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