Select Page

Selling a tenanted property 

If you want to sell a rental property with tenants there are certain things you need to know.

When checking on the internet make sure that the advice you are reading is for selling property with tenants UK.  The law is different in the USA and other countries.  So, put ‘selling property with tenants UK’ in the search bar to obtain the latest correct advice that is relevant to your needs.

Selling an investment property that you own or have a buy to let mortgage on can be sold with a tenant living there or as a vacant property.  You need to be clear before you put the property on the market which type of possession you are selling.

There are advantages of selling a tenanted property with tenants and advantages of vacant possession.  So it is worthwhile having conversations about it with the different estate agents who value the property.  The price you achieve may or may not be that different in areas where there is a limited number of properties available.  Local estate agents will know the market in the area. When selling a rental property with tenants you want to weigh up the pros and cons right at the beginning before selling a tenanted property.

Occupied or Vacant

A tenanted investment property where the tenant is a good tenant and pays the rent means that you continue to earn an income from the property while it is on the market.  A good tenant will also appeal to many investment buyers.

If you decide to sell with a vacant position, you will have to give your tenant notice to leave and even if you say they can stay until the property is sold, there is a chance that your tenant will find alternative accommodation before your property is sold.

If you have a buy to let mortgage, check the terms carefully, there may be financial penalties for selling the property before a fixed-term arrangement is complete. Alternatively, if the fixed term is within a few months of ending, then the house will realistically take two to three months until completion.  You could realistically set the completion date for the day after the fixed term period ends.

Capital Gains Tax

Because a tenanted property is usually classed as an investment property, they are usually subject to capital gains tax when they are sold.  Consider the tax implications carefully before selling a tenanted property.  The tax is up to 28% of the increased value of the investment, meaning that you may not gain as much as you think.

However, if you are unsure, seek good advice because what is called capital improvements to the property can usually be offset towards the tax liability.  Also, check the position of your annual allowance for capital gains.

Selling a Rental Property with Tenants

The tenancy agreement is a legal contract between the landlord and the tenant. When the property is sold the new owner takes over as the landlord.

When the end of the tenants fixed term period is approaching they can be given notice within the scope of the agreement. So if you sell a tenanted property and complete with two months to run on a fixed period the new landlord can give the tenants notice to quit and move out at the end of their contract.

Should you sell a property and the tenants still have several months left then if you want to gain vacant possession you will need to serve a Section 21 notice and give adequate notice for them to leave.

If you sell the property with tenants, then the new landlord could serve a Section 21 notice.

When the tenants are on a rolling contract, then the amount of notice is as laid out in the tenancy agreement.

When you have decided the route you are going to take regarding selling a tenanted property then you need to have a meeting with your tenants and let them know what is going on.  Tenants are entitled to quiet enjoyment of their home and you will have to discuss with them their preferences regarding viewings.  Depending on the stage of the tenancy and the exact wording of the agreement they may be entitled to refuse entry for viewings.

That is one of the reasons why it makes sense to get the tenants on side when selling a tenanted property.

Another is that by being reasonable with the tenant they are more likely to be cooperative and show the property in a good light.

Other Things to Consider

If you rent the property out through a letting agent and the tenants are being given notice or the new owner doesn’t want to adopt the letting agent agreement there may be penalties to pay regarding the commission that the agent would expect to receive for the term of the tenancy.

When selling a tenanted property as an investment property the new owner will want to check that your paperwork is all in order.

The paperwork includes things like:

  • A signed tenancy agreement showing the terms of the tenancy
  • Gas safety certificates
  • Electricity safety certificates
  • Deposit protection scheme paperwork
  • Evidence of the tenants right to rent
  • If relevant, copies regarding legal notices served on the tenants
  • Information about any current repairs, scheduled repairs or complaints about outstanding repairs
  • If the property is let as a furnished dwelling then you need to supply an inventory listing the fixtures and fittings.
  • The tenant deposit will need to be transferred to the new owner.

There are pros and cons when selling a rental property with tenants.  Gather the information and decide which way you are going to go at the start of the selling process.

For information regarding selling a tenanted property check these websites:

Get selling a tenanted property conveyancing advice here:


For quick house selling options check our three quick sale options here.