From Inherited Properties To Downsizing: When To Consider A Property Buying Company In The UK

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Selling a property privately can be time-consuming and complex, especially if legal or logistical hurdles exist. For sellers facing challenges, enlisting the services of a property-buying company may provide the simplest solution.

Property-buying firms offer to directly purchase properties from owners at competitive prices, taking on the legal formalities themselves. This provides a swift sale and release of funds without the needs and stresses of a private sale.

For those inheriting properties, downsizing retirees or owners of leasehold flats, sale complications often arise. In these situations, a property-buying company can present an advantageous route to capitalise on the asset whilst simplifying legal obligations.

This guide examines when why and how to consider a property-buying company across some common sale scenarios sellers encounter.

What is a Property Buying Company?

These are specialist companies that aim to purchase properties directly from owners seeking a quick and assured sale. They provide an alternative solution to selling privately or via estate agents.

After an initial property valuation and consultation, the firm makes an offer to buy the property outright, handling the entire sales process and legal formalities for the owner.

On acceptance of their offer, the company takes over responsibility for surveys, legal fees and completion. This provides owners with a guaranteed sale, often within tight timeframes, without the risks and burdens of finding their buyer.

For those needing or preferring to sell rapidly, this streamlined approach allows capital release from property assets without conveyancing stresses. Companies profit by remortgaging or selling on at higher values later.

How It Compares to Private Sales

Some key differences exist between enlisting a dedicated buyer versus selling privately:

Control – Private sales allow owners to select the buyer and negotiate prices directly. Buying companies assume control of the sale by making outright purchase offers.

Timing – Private sales can involve unpredictable delays in finding interested buyers. Buying companies proceed rapidly once an offer is agreed.

Workload – Private sales place legal and logistical burdens fully on the owner. Buying companies absorb the conveyancing workload.

Fees – Private sales incur standard conveyancing, marketing and estate agent fees. Buying companies incorporate their costs and profit margins into purchase prices offered.

Risks – Private sales carry risks like fall-throughs and gazumping. Buying companies provide certainty once an offer is accepted.

For owners motivated by convenient capital release over maximum sale prices, property-buying firms offer clear advantages. But those prioritising higher sale values may prefer exploring private sale routes.

Common Situations Where Owners Consider Property-Buying Companies

While some opt to sell privately out of choice, for others specific circumstances prompt engaging a property-buying firm as a simpler solution:

Inherited Properties – Beneficiaries may wish to quickly liquidate inherited properties, especially if located remotely.

Probate Delays – Heirs can sell to property buyers pending finalised probate to release funds sooner.

Emigration – Those moving abroad long-term often do not wish to retain UK property portfolios requiring international management. Property buyers offer a clean break.

Downsizing Retirees – Older sellers can sell directly to avoid house sale pressures and strains when downsizing.

Leasehold Flats – Selling leasehold flats privately can be challenging. Property buyers represent guaranteed buyers willing to take on the lease.

Tenanted Properties – Landlords sometimes sell tenanted properties to property buyers to hand over ongoing tenant management obligations.

Complex Ownership – Some jointly owned or disputed properties can prove difficult to sell conventionally. Property buyers present uncomplicated solutions.

In these situations, property-buying companies appeal by removing the significant time and stress barriers sellers could otherwise face.

How Do Property Buying Companies Operate?

The process typically follows defined stages when using a property-buying firm:

  • Owner Enquiry – The seller contacts property-buying companies, providing property details and motivations.
  • Valuation Visit – The company arranges a valuation inspection to assess its purchase potential.
  • Offer – Based on property assessments, a cash offer price is proposed to the seller.
  • Acceptance – If happy with the offer, the owner accepts in writing alongside proof of ownership.
  • Conveyancing – The company commences legal due diligence and conveyancing leading to contracts.
  • Completion – Full payment is made on the completion date, transferring legal ownership.
  • New Ownership – The buyer takes possession, with options to live there, rent out or sell.

Reaching initial offer acceptance is the critical step for sellers, establishing a binding commitment from the company to purchase the property.

What to Look for in a Property Buying Company

Assessing a firm’s credibility helps ensure a smooth process. Check:

  • Membership – Companies should be members of recognised industry bodies like The Property Buyers Association to demonstrate compliance with codes of practice.
  • Reviews – Testimonials and independent reviews give insight into customer service levels and satisfaction. Be wary of entirely positive reviews.
  • Track Record – An established history of several years of trading suggests stability in the market. Check Companies House records.
  • People – Personnel should have experience in residential and commercial property, law and finance to demonstrate competence.
  • Process – The buying procedures followed should be clearly defined, reasonable and transparent.
  • Regulation – Appropriate regulation for financial probity, data protection etc should be evidenced.

While most firms are reputable, undertaking prudent checks provides sellers confidence in selecting an appropriate firm.

Questions to Ask Property-Buying Companies

During initial discussions, some key questions sellers should ask include:

  • What valuation approach do you use to reach offers?
  • How quickly can the purchase realistically be completed?
  • Do you cover all conveyancing and legal costs?
  • How do you assess and limit risks before purchasing?
  • Will the offer price change later in the process?
  • Is the property purchased through a company or personally?
  • Can I remain in the property for a period post-completion?
  • How easily can I contact your company throughout the process?

Probing demonstrates the company’s professionalism and allows sellers to determine compatibility with their requirements.

Fair Valuation for Sellers

Receiving a fair market offer for their property is understandably a primary concern for sellers. Property-buying companies must balance offering enticing prices against their own need to profit.

The discounted price reflects their costs, risks and profit margins. While usually reasonable, sellers should still compare against private valuations to validate if the company’s offer represents good value.

Exchanging rapid, certain sales for maximum prices requires balancing trade-offs. But most sellers ultimately prioritise convenience provided reliable offers are received.

Downsides for Sellers Using Buying Companies

Some limitations sellers should note include:

  • Absorbing discounts from market values – purchases below private sale prices sacrifice capital gains.
  • Little control – buyers assume the entire sales process once offers are accepted.
  • Swift timeframes – prolonged completion dates are rarely feasible as the benefit is rapid sale.
  • Property risks – any latent defects or problems become the buyer’s concern after completion.
  • Leasing restrictions – buyers may prohibit leasing properties back to sellers after purchase.
  • Inheritance risks – future probate difficulties can arise if re-sold soon after a seller’s death.

While providing convenience, sellers relinquish control and an element of value by opting for property buyers over private sales. But this secures a quicker, easier sale and release of funds.

Inheriting Property from a Deceased Estate

One of the most common triggers to consider engaging a property-buying company is inheriting a property through a will or intestacy.

For beneficiaries not wanting the duties and liabilities associated with ownership of the inherited property, a sale to a property buyer offers:

  • Quick monetisation – Sale proceeds are released to beneficiaries faster than private sales, especially if probate delays are involved. Even before grants of probate, some firms may propose offers to begin formalities.
  • Avoiding empty property costs – Property buying firms purchase with sitting tenants so ongoing costs can be avoided if already let. For vacant properties, inheritances can sell quickly, preventing standing empty costs from accumulating.
  • Independence from house chains – Beneficiaries selling inherited property often have no new purchase lined up, allowing clean sales without onward transactions complicating matters.
  • Certainty of sale – Compared to the open market, a property buyer provides a guaranteed buyer, removing uncertainty and risks of fall-throughs.
  • Flexible tenures – Buyers may permit beneficiaries several weeks in the property post-completion if the extra time to clear and vacate is needed.

For inheritances in locations impractical to manage from afar, a reputable property-buying company often provides the simplest solution for beneficiaries seeking swift financial gain.

Downsizing for Over-55s

Another scenario where property buyers commonly assist is retirees over 55 looking to downsize or release equity.

Older sellers may be looking to move closer to family or right-size to a manageable property more suited to their lifestyle needs.

This downsizing process often comes with hesitancy around market uncertainties and apprehension about navigating sales. As such, benefits arise from enlisting a property-buying firm, including:

  • Handover of stresses – the company project manages the entire sales process, liaising with conveyancers, surveyors etc.
  • Certainty – Guaranteed buyer provides confidence, avoiding anxieties of finding the right buyer.
  • Fixed future costs – Buyers purchasing with tenants in-situ provides clarity on future housing costs when budgeting for retirement.
  • Avoid house chains – Downsizers commonly have no onward purchase, speeding sales.
  • Cash release – While offering slightly under market value, the company still enables equity release from the property to support retirement.

For older generations, property buyers simplify downsizing greatly while still realising sufficient capital from their largest asset during a major life transition.

Selling Leasehold Flats

Although private sales are possible, selling flats subject to short, expensive leases increasingly requires creative solutions.

Factors like high ground rents, escalating service charges, deferred maintenance and cladding issues create headwinds when attracting buyers.

Property-buying companies provide a lifeline for those struggling to shift leasehold flats by offering to take on the associated obligations.

Benefits for sellers include:

  • Guaranteed buyer – Certainty of sale avoids leasehold flat remaining unsold if unmortgageable.
  • Cash despite issues – Buyers can still provide competitive cash offers to account for lease challenges.
  • Avoiding lease – Sellers release themselves from all future lease liabilities through the sale.
  • Speed – Relieve flat valuations declining further as lease length shortens by selling rapidly.
  • No repossession risk – Lenders may repossess flats with short leases. A sale provides a dignified exit.

While valuations account for detriments like ground rents, property buyers still represent sellers’ best prospects of moving on from unmarketable flats.

Conclusion

Property buying companies fill an important niche facilitating swift, seamless sales for those unable or unwilling to undertake private disposals.

While discounts on values are absorbed, the certainty, convenience and legal simplicity offered appeal to many needing pragmatic rather than perfect solutions.

Those facing pressing deadlines, complex ownership situations or lease terminations are frequent beneficiaries. Retirees, executors, landlords and power of attorney holders also commonly leverage property buyers’ services.

Provided sellers are informed and comfortable relinquishing control over buyers and pricing, property-buying firms can unlock property value efficiently. Legal expertise and guaranteed finance allow them to shoulder the risks and burdens of even challenging properties.

For owners prioritising hassle-free sales above maximising prices, reputable property-buying companies cater well in exchange for the value discounts they apply. Ultimately, their existence facilitates the beneficial liquidation of dormant or problematical assets in return for a swift conclusion.

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We are proud to be the most regulated property buyer operating in the ‘Quick House Sale’ industry. We are an active member of the NAPB (National Association Of Property Buyers) and are RICS regulated, which means you can have every confidence of selling your home with us quickly & easily.