Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.
Repeat Landlords Opt for Equity Release Over Full Market Value
Some experienced landlords are choosing to accept less than the full vacant-possession value of their properties in order to release equity quickly and reduce the risks and costs associated with traditional sales. According to a report by Property118, many landlords who have built up substantial equity are prioritising certainty and speed over maximising sale price.
The Landlord Sales Agency states that it does not promise the highest possible theoretical value for every property. Instead, it agrees a figure with the seller and uses the equity above that amount to facilitate the sale, manage tenant issues, and cover costs that would otherwise be paid by the landlord.
One example cited in the report involves a Manchester landlord who began selling part of his portfolio in 2021. For his first property, the agency worked directly with the tenant to market the property before it was vacant, securing a cash buyer and completing the sale in 64 days. The landlord received £115,000, with the property only empty for two weeks, allowing him to collect rent for most of the period.
The report notes that sellers typically walk away with 85–90% of the property’s vacant possession value. It also outlines that, after accounting for agency and legal fees, lost rent, and other costs associated with a conventional sale, the net proceeds from a traditional sale may not be significantly higher than those achieved through the agency’s approach.
The Manchester landlord has since sold six more properties through the agency, with varying levels of complexity. The agency has managed sales with tenants in situ, resolved access issues, found replacement buyers when sales fell through, and mediated disputes to keep transactions on track.
For letting agents and inventory clerks, the report highlights the importance of flexibility and problem-solving in property sales, especially when tenants remain in place or when sales processes become complicated.
Source: Property118