Selling Tenanted Property?

If you own a rental property with sitting tenants and are considering selling it, you may be pleased to know that eviction may not be necessary. 

A common misconception in the rental market is that you need to evict tenants to get the highest possible price for your property. However, the reality is that the right buyer will value the ongoing rental income, especially if the yield is high.

In this guide, we will explain everything you need to know about selling a property with tenants in situ, including eviction rights, reasons for selling, and the steps to take for a successful selling process.

Key takeaways:

• Landlords can sell properties with tenants, transferring the existing tenancy agreement to the new owner.

• Potential buyers must be aware of the tenancy, which may attract investors but reduce interest from those seeking empty properties.

• Selling homes with tenants can be strategic due to changing financial and regulatory conditions, impacting profitability and management. 

• Selling to a cash buyer like The Property Buying Company is the best way for landlords to sell properties with tenants in situ.

Table of Contents

• Can you sell a house with tenants in situ?

• Why sell a tenanted property?

• What are the advantages of selling a house with tenants?

• What are the disadvantages of selling a house with tenants?

• What do you need to know as a seller?

• How to sell a tenanted property

• FAQs about selling a house with tenants

Can you sell a house with tenants in situ?

As a landlord, you can sell a house with tenants in situ. When you sell a tenanted property, it means that the tenants remain in the property under their existing tenancy agreement even after the sale.

When you put your house on the open market or start advertising the property for sale, you must make any potential buyers aware that the property has tenants. This will probably lower the number of interested buyers because most house hunters are looking for vacant properties, but there are also many buyers looking for tenanted homes.

The existing tenancy agreement remains in place, and the new owner must honour the terms originally agreed. This includes the duration of the lease, the rent amount and any other conditions agreed upon. The security deposit you previously held should also be transferred to the new owner, who will then become responsible for it.

How easy is evicting tenants to sell house?

Evicting tenants to sell a house can be quite difficult, but not impossible. It is more complicated than selling an empty house because you need to provide your tenant with a written notice and follow a Section 8 notice.

You must follow strict guidelines on how and when you can evict your tenants, and wanting to sell your house is not a strong enough reason. Section 8 of the Housing Act 1988 allows eviction based on specific grounds, such as:

• You want to move back into the property.

• Your tenants have used the property for illegal reasons.

• The tenants are behind on payments (in arrears).

• There is a break clause in your contract. 

Section 21 of the Housing Act 1988 allowed landlords to end tenancies without giving a reason if they gave at least two months’ notice in writing—these were known as ‘no-fault evictions’. However, the Renters’ Rights Bill 2025, which is slated to become law in late 2025 or early 2026, promises to abolish that possibility “to end the scourge of section 21 evictions” in the UK. 

Writing for the NRLA, Eleanor Bateman states that “the Bill is extremely unlikely to receive Royal Assent before Parliament rises for summer recess on 22nd July,” so it is more likely to come into effect later in the year. 

Given the complexities of such evictions, many landlords opt to sell their property with sitting tenants. This approach can attract buyers interested in rental income and avoid the costs and delays associated with evicting tenants.

Why sell a tenanted property?

Selling a house with tenants could either be a strategic move to release equity in a property, diversify your portfolio or be part of your exit plan.

While the idea of having a steady rental income and appreciating assets might seem appealing, the reality is that managing tenanted properties involves more than meets the eye. There are, however, various reasons why landlords like you may decide to sell their tenanted properties.

One of the most common reasons we encounter is that landlords have realised their current local market is no longer as profitable as it once was. The increasing regulations, costs, and tax burdens make property ownership more challenging, especially for landlords with significant debt. 

Additionally, changes in the property market, such as rising interest rates and market risks, can make selling a property with tenants a wise choice to maximise their return while they still can.

Section 24 Landlord and Tenant Act 1954

The Section 24 changes and the Tenant Act have created significant challenges, especially for established landlords, prompting many to consider selling their tenanted properties. 

One of the primary financial impacts of Section 24 is the reduced mortgage interest relief. This has restricted landlords from deducting mortgage interest payments and other costs from their rental income before calculating their tax liability, instead offering a basic rate tax reduction. 

This change has substantially reduced profits, especially for higher-rate taxpayers, making it less financially viable to hold onto rental properties. Consequently, many landlords face higher tax bills, and for some, the rental income may no longer cover the mortgage payments, leading to a negative cash flow situation. This reduced profitability makes continuing to rent out properties far less attractive.

Increased regulatory burdens from the Tenant Act also play an important role in landlords’ decisions to sell. Recent amendments to tenant legislation have enhanced tenant rights, making property management more challenging.

For instance, changes include longer notice periods for evictions and stricter rules on maintaining property standards. Additionally, landlords must comply with numerous regulations to ensure tenant safety and well-being, such as mandatory electrical safety checks, smoke and carbon monoxide alarms and energy efficiency standards.

These compliance costs can be substantial, further diminishing the financial appeal of rental properties. Stricter eviction rules make it harder for landlords to remove problematic tenants, adding another layer of complexity and discouraging landlords from continuing to rent out their properties. 

Even if Section 24 were to be abolished, existing financial strains may still drive landlords to sell. Those who have already faced financial challenges due to higher taxes and reduced profitability might opt to stabilise their financial situation by selling their properties.

Government regulations

The overall impact of financial and regulatory changes is a significant decrease in the profitability of rental properties. 

Costly energy efficiency improvements and the Stamp Duty surcharge have also impacted the profitability of Buy-To-Let properties. Government regulations now require landlords to make significant investments in improving the energy efficiency of their properties, adding another layer of financial strain if the property is of historic stock. 

Difficulty in raising rents due to affordability issues and the negative perception of landlords in certain sections of the media further contribute to the decision to sell. 

Additionally, some landlords may have been planning to sell for some time and see legislative changes as an opportune moment to exit the market, particularly if property values are favourable. Stricter eviction rules under new regulations may also deter landlords who have experienced difficulties with tenants in the past, further encouraging the decision to sell.

Property market risks

Changes in the property market, such as rising interest rates and market risks, can make selling a property with tenants a wise choice to get the highest return on investment possible. When interest rates rise, mortgage payments for landlords with variable-rate loans also increase, squeezing profit margins. 

Moreover, market risks such as fluctuating property values can lead to uncertainty about future returns on investment.

Rising interest rates

Rising interest rates are a significant factor in landlords’ decisions to sell. Higher interest rates increase the cost of borrowing, making mortgage payments more expensive and reducing the overall profitability of rental properties. For landlords with significant mortgages or even debt, this can be a tipping point that prompts them to sell. 

Refurbishment works required

Other factors influencing the choice to sell include the challenges of dealing with problem tenants, the rise of purpose-built rental developments, the need for significant refurbishment and the desire to release locked-in equity for various purposes. 

Older properties often require substantial refurbishment to meet current standards, which can be both costly and time-consuming. For many landlords, selling the property rather than investing in extensive refurbishment works can be a more practical solution.

What are the advantages of selling a house with tenants?

Selling a house with tenants in situ offers many benefits, including immediate rental income for the buyer, continued cash flow for the seller, avoidance of rent-free periods and minimal disruption for tenants. 

Cost-effective and smooth selling process

Selling a property with tenants in situ offers several advantages for landlords, making it a cost-effective and relatively smooth route to selling. One of the primary benefits is the ability to market the property as a Buy-To-Let investment, which is particularly appealing to fellow landlords, first-time buyers and investors. 

For the new buyer, acquiring a property with existing tenants means immediate rental income from the day of purchase, eliminating the waiting period for tenant referencing and the associated costs of preparing a property for rent. These factors significantly enhance the property’s attractiveness and can be strong selling points for landlords.

Continuous cash flow for the seller

Another advantage is the continuity of cash flow for the seller. Landlords can continue to receive rental payments up until the date of the sale, maintaining their income stream without interruption.

Additionally, both the seller and buyer can avoid void periods—a time when the property would otherwise be empty and not generating income—thereby maximising financial efficiency and stability.

Stability for tenants

From the tenant’s perspective, a sale with tenants in situ means minimal disruption. Tenants can remain in the property they are familiar with, providing stability and continuity for them as well. This stability can be particularly appealing in a competitive rental market where tenants value security and long-term residence options.

What are the disadvantages of selling a house with tenants?

While there are many advantages to selling a house with tenants in situ, it is important to understand the disadvantages as well. 

They include limited access for viewings, complications without existing viewing arrangements, the potential for poor property presentation, and a reduced pool of potential buyers, which landlords must consider when selling a property with existing tenants.

Limited access for viewings

One of the major disadvantages of selling a house with tenants is the restricted access for viewings. With a tenant already living in the property, an estate agent cannot show potential buyers around the house unannounced.

As a landlord, you cannot demand access to a tenant’s house at the drop of a hat. Prospective buyers will understandably want to look around the property, which can create a challenge if your tenants are uncooperative. 

One way to get around this is to include a right to conduct viewings in your tenancy agreement, requiring you to give your tenants written notice of 24 hours prior to the viewing taking place. 

Top tip: Landlords who sell to cash buyers like The Property Buying Company don’t have to worry about conducting traditional house viewings—we don’t need to carry them out to get a full picture of your property’s market value.

Complications without viewing arrangements

If no such arrangement exists within your rental agreement, things become more complicated. In this case, you’ll only be able to show potential buyers around with the express permission of your tenants.

Ideally, your relationship with your tenants will be good enough for them to agree to viewings. However, if they refuse, your best option is to reach a compromise, perhaps by offering to discount their rent for a month to compensate for the inconvenience.

Presentation and property condition

Another important consideration is the condition of the property during house viewings. Tenanted properties might be messy and unclean, which would not give the best impression to potential buyers. A cluttered or poorly maintained home might prevent buyers from seeing the true potential of the property, which could lessen their interest in making an offer. 

Limited buyer pool

While a tenant-in-situ property is an attractive option for those looking for a Buy-To-Let opportunity, it will not interest buyers who are looking to purchase a house to occupy themselves. This accounts for most of those looking to buy property in the UK—only 9.2% of customers in our data for 2025 were seeking tenanted properties.

It is unlikely that such buyers will want to go through the trouble of evicting a tenant, thereby limiting your potential market to investors only. 

What do you need to know as a seller?

As a landlord, when selling a Buy-To-Let property with tenants, there are several things you need to know. The first thing is that there are many ways that you can sell. One approach is to sell the property “as-is”, which is a common choice amongst landlords looking for a relatively fast transaction for their property portfolios. 

By opting for this route, you open the door to potential buyers who are either fellow landlords or owner-occupiers willing to invest some effort into refurbishing the property. These individuals are usually undeterred by the presence of current tenants and are willing to take on the responsibility of managing the property. 

It’s important to consider the desires of the tenants themselves. In some cases, the tenants may express an interest in remaining in the property even after it changes ownership. Should this be the case, selling to another landlord who is willing to accommodate their tenancy becomes a more suitable option. 

By selling to a new landlord, you not only provide a convenient solution for the tenants, who avoid the hassle of finding alternative housing, but you also benefit from the rental income up until the completion of the sale. 

What happens to the tenant’s deposit?

As part of the sale, you will need to arrange for the tenant’s deposit to be transferred to the buyer. The new landlord must register the tenancy deposit for protection, ensuring it complies with legal requirements. Before transferring the deposit, the new landlord should provide proof of registration.

The process must be completed within 30 days of the sale. It is important to note that the original registration cannot simply be transferred between two deposit scheme-insured accounts. The terms of the tenant’s agreement should remain unchanged.

7 reasons why landlords sell tenanted properties

These days, the “set and forget” approach to rental property is no longer viable. Many landlords find themselves dealing with more hassle than expected and need to adopt a completely different attitude than they would have needed 10 to 20 years ago.

Individually, each of the reasons imposes some level of financial burden on landlords. However, when combined, the strain becomes a very significant squeeze. Rising costs from increased regulation, maintenance and refurbishment needs, coupled with reduced profitability from tax changes and interest hikes, make rental properties far less financially viable.

How to sell a tenanted property

There are a few different routes you can take to sell your property in a pain-free way—let’s take a look at some of them here: 

Selling to a regular buyer

When selling your tenanted property to a regular homebuyer, it’s ideal to align the sale with the tenant’s departure, depending on the property’s condition. However, if the property requires refurbishment, it’s advisable to complete the work yourself to potentially achieve a higher market price.

If you choose to sell your house to a cash buyer, refurbishments aren’t necessary as they typically purchase properties “as-is.” This is exactly how we go about buying houses at The Property Buying Company—you can find out more about how it works here.

Selling a house with tenants in situ on the open market presents challenges, particularly when it comes to arranging viewings. Balancing the sale process with protecting your tenant’s rights requires careful planning to avoid straining the relationship. 

Here are some best practices:

1. Giving notice: Provide your tenant with at least 24 hours’ notice before a viewing. The more notice you give, the easier it is for them to make arrangements, reducing their stress.

2. Seek consent: Always obtain the tenant’s consent. If the proposed date and time for viewings are inconvenient, you must reschedule. Ask when the most convenient time for them is and plan accordingly.

3. Be cautious: Avoid scheduling constant viewings, as this can be perceived as intrusive and may violate your responsibilities as a landlord. Tenants have significant rights in this situation, and failing to respect them could be considered trespassing.

Selling a property to another landlord 

Selling your property with a tenant in situ to a landlord can be a great way to avoid the immediate eviction process and keep monthly rental income coming through until the property sells. 

If you are looking to sell your property with a tenant in situ to another landlord, you will need to take into account that you are selling your business to another business owner, and therefore will need to take care in preparing documentation to increase the chances of a sale completing. 

Many landlords will be Buy-To-let investors, and will be very intrigued by the amount of rental yield tied to the property, and what Return on Investment (ROI) they can get from your property. This is particularly true of investors who are part of our network at The Property Sourcing Company—they seek unique off-market opportunities at various levels and may be interested in tenanted properties.

Be sure to do your research, though, so you know what the rental market looks like before you sell. A recent Rental Market Report from Zoopla (June 2025) illustrated an end to a four-year surge in rents for new tenancies, which is indicative of increasing financial difficulties for potential renters. This might have an impact on the interest levels you receive from other potential landlords in the market. 

Regardless of the type of landlord your buyer is, you will need to provide them with the following information—your solicitor will be able to help you with most of it:

As the seller of your tenanted property, you need to make sure that the prospective buyer has the appropriate financing in place. This could be through a cash purchase, Buy-To-Let mortgage or a bridging loan. 

If a new landlord has secured the correct financing, aim to align the completion date with the due date of the rent. This avoids the need for rental apportionments, making the transition smoother and simpler. 

If rental payments are made to a lettings agent, with whom the buyer wishes to continue, the agent should be notified. If not, the new landlord’s conveyancer will need a letter of authority from you, the seller, confirming that the tenant will pay rent to the new landlord. 

The buyer’s solicitor must ensure the Section 48 Notice is correctly served. This requires the new landlord to inform the tenants that the property interests have been legally transferred in accordance with Section 8 of the Landlord and Tenant Act 1985. 

Existing tenancy agreements will remain valid under your name, even though there will be a new owner. In some cases, property owners enter into a commercial lease with a proactive landlord and split the profits, a practice known as rent-to-rent or guaranteed rent arrangement.

Selling your house to your tenant(s)

Selling your tenanted property directly to the tenants in situ can be mutually beneficial, helping your tenant get onto the property ladder and making the process easier and less costly for you. 

This route offers several advantages:

• No need for new buyers: Selling to your current tenant eliminates the need to search for new buyers or pay an estate agent to market your property.

• Reduced sale time: The process can be faster, as you already have an interested party in place. 

To proceed, you must provide your tenant with formal notice of your intention to sell, ensure their right to fair negotiation, and follow the terms of their existing tenancy agreement. 

If you currently work with a letting agent, check your obligations for ending the arrangement, including any required notice period or fees for selling to the tenant, as some contracts may require you to pay a fee since they originally introduced you.

Some landlords decide to offer tenants a discount on the market value of the property to help it sell, too. This acknowledges the rent paid over previous months and years and saves on estate agent fees. The discount can act as a deposit, helping tenants level the playing field. 

However, there are some risks to consider when selling to your tenant:

• Price negotiations: Tenants may push for a price reduction, arguing they’ve been paying rent for years and you’re saving money by selling to them.

• Mortgage eligibility: Ensure your tenant is eligible for a mortgage and obtain a Mortgage Agreement in Principle before starting the sale process.

• Tenancy agreement complications: There may be complications if the tenancy agreement ends before the property purchase is complete.

Selling your property to a cash buyer

Whether you are selling a single house or have a whole property portfolio to sell, you can go with a cash buyer to reduce the complications that can arise via any of the other routes outlined above.

This route can offer you: 

• Minimal disruption: Both you and your tenant(s) can enjoy an unintrusive path to a successful property sale, thanks to the fact that no protracted viewings need to take place

• Complete discretion: You’ll have total discretion as the landlord to sell your house quickly and easily without having to deal with estate agents

• A shorter wait: You’ll likely be able to sell your house(s) much quicker than you would on the open market because you don’t have to worry about buyers dropping out or negotiating until the end of time

At The Property Buying Company, we offer a hassle-free, stressless experience for selling any kind of property and the best bit is that you could have the money in your bank within days.

To avoid the trouble of navigating complicated legal grounds and lengthy waits on the open market, simply enter your postcode below to get started on selling your tenanted property.

FAQs about selling a house with tenants