An online agent that promises to “revolutionise” the buy-to-let market by allowing the sale of homes with tenants in place has raised £2m since December and is aiming for £3m.
Vesta launched earlier this month and charges landlords a fee of £900 or £1200 to sell tenanted properties.
It manages the viewings on behalf of landlords.
The company claims to have already secured marketing rights over 177 tenanted properties (both individual units as well as apartment blocks) which are collectively valued at over £50m.
Vesta is backed by a rollcall of property and fintech experts including Bob Wigley (chairman of UK Finance), Chris Lacey (until recently Head of Residential Capital Markets at CBRE), David Ritchie (former CEO of Bovis Homes), Keith Morris (former chairman and co-owner of Sabre Insurance), and David Toplas (Vesta’s founder and CEO of Mill Group).
It said it completed a first close of its funding round, raising £2m since December.
A second and final close is scheduled for mid-March, with a view to taking this amount to £3m.
The business has advance assurance from HMRC that it will qualify for its Enterprise Investment Scheme.
Chief executive Russell Gould said: “I’m delighted with the support received from both existing and new investors.
“We have a first-class shareholder base, having attracted an incredible calibre of investors who bring far more than just funding, but add invaluable intellectual capital too.
“Our investors share our belief that Vesta’s innovative marketplace will revolutionise the Private Rented Sector, bringing together housebuilders, buy-to-let sellers, buyers and property investors and removing significant market inefficiencies.”
I think the idea is good as landlords would like to be more fluid and good for large landlords excluding HA’s but is the pond a small one. What is the % of properties that are let if you take out HA’s?. Big deal they have 177 instructions, at £900-£1200 a pop, it ain’t going to pay too much.
Raising cash seems to be the easy part now days, especially if you are not trading. Making it once you are does not seem to be a requirement!
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All well and good but we currently find we sell for a higher price with vacant possession in 95% cases. There is a short void but the improvement in sales price makes up for than tenfold.
We have done a very large number of sales with tenants remaining but that market fell away almost completely about 18 months ago.
If you really, really have good reason to sell with tenants in occupation then auction is the only realistic route to follow.
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Revolutionise is the norm. We hear it everyday on here. As my esteemed colleague succinctly pointed out “Raising cash seems to be the easy part now days, especially if you are not trading. Making it once you are does not seem to be a requirement!”
Have these people worked on the front line or just tech guys sat behind a Mac?
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I am retained by a large BTL investor. We now, having learned from experience, never buy with a tenant in place. It’s vacant possession or no purchase. In fact exchanging quickly and telling the existing landlord that they can enjoy the rental income until the expiry of the AST is often why we get the property over someone else.
Choosing your own tenants and ensuring the contracts have been served correctly is too important to risk by inherting someone elses mess.
So good luck with that guys.
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A great idea – the B2L sector is substantially ignored by occupier focused agents and portals – a sector that is valued at more than £1.4 trillion and has been larger than social housing for some time – quite a niche!
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