Landlords sell for all sorts of reasons: retirement, changes to tax or regulation, a difficult tenancy, or simply wanting the money back. The first decision is whether to sell with the tenants still living there or to wait until the property is empty. This guide covers the main points for landlords in England and Wales.
Two ways to sell
With tenants in place
The tenancy carries on after the sale, and the buyer becomes the new landlord. The tenants keep all their rights, and the buyer takes on your responsibilities. The buyer is usually another landlord or an investor, so the price tends to reflect the property’s value as an investment — rental income, condition and the tenancy itself — rather than what an owner-occupier might pay.
With vacant possession
If the tenants leave first, you can sell to anyone, including buyers who want to live there, which often means a higher price. But getting vacant possession can take time, particularly if the tenants don’t want to move. You must follow the correct legal process — there are strict rules on the notice you give and the grounds you can rely on, and you can’t pressure tenants to leave or change the locks.
Talk to your tenants
Tenants are far more likely to cooperate with a sale if they understand what’s happening. Let them know early, explain whether they’re likely to be able to stay, and agree how viewings will work. Your tenants have a right to live in the property undisturbed, so give proper written notice before visits and arrange them at reasonable times.
It’s also worth asking whether your tenants would like to buy the property themselves. It can suit everyone — no viewings, no need to find a new home, and a buyer who already knows the house.
The paperwork a buyer will want
A buyer, and their solicitor, will want to see that the tenancy has been set up and run properly. Gather these early:
- The written tenancy agreement (or occupation contract in Wales) and any renewals.
- Evidence that the deposit is protected in a government-approved scheme, and the information given to the tenant.
- Current gas safety record, electrical safety report (EICR) and Energy Performance Certificate.
- Any licence needed from the council, such as an HMO or selective licence.
- Rent records, including any arrears, and details of any disputes or notices served.
- Inventory and records of repairs.
Deposits and rent at completion
If you sell with tenants in place, the tenancy deposit needs to be transferred to the new landlord and protected by them, or returned in line with the scheme rules. Rent is usually apportioned on completion, so you receive rent up to the completion date and the buyer from then on. Your solicitor will handle the details.
When the tenancy is difficult
If rent isn’t being paid, the property is in poor condition, or the relationship with the tenant has broken down, selling may feel like the simplest way out. It can be — some buyers specialise in properties with complicated tenancies. But your legal obligations continue until completion, and any notices or court action must follow the correct process. A landlord specialist solicitor, or organisations such as the National Residential Landlords Association, can advise. Tenants who need advice can contact Shelter or Citizens Advice.
Tax to consider
Selling a rental property may mean Capital Gains Tax on any increase in value, which generally has to be reported and paid within 60 days of completion. An accountant can help you work out the figure and whether any reliefs apply.
If you’re weighing up selling with the tenants in place, see how we buy tenanted properties, or read our guide on direct sale vs estate agent.