Selling a house with tenants in it

What changed on 1 May 2026

The Renters' Rights Act changed the rules for private landlords in England. From 1 May 2026, no new section 21 notices can be served, and most assured shorthold tenancies became assured periodic tenancies. There are no more fixed terms that simply end: a tenancy now rolls on until the tenant gives notice or the landlord uses one of the grounds for possession in section 8.

For a landlord who wants to sell, that matters in two ways. The quick route to an empty house has gone. And a tenancy you sell with is now open-ended, which is something a buyer will think about.

Selling with the tenants staying

A private landlord can sell a house that has tenants living in it, and you don't need their permission to do so. The buyer becomes the new landlord, and the tenancy continues on the same terms. No new tenancy agreement is needed.

The deposit has to stay protected, and the new landlord takes on responsibility for returning it at the end of the tenancy. In practice, the deposit is transferred as part of the sale and the protection scheme updated. The new owner must also give the tenants their name and address within two months of buying.

Everything else carries across too: the rent, the repairing obligations, the safety certificates and any history. A buyer's solicitor will ask for all of it, so the tidier your records, the smoother the sale.

Getting the house empty first

If you want vacant possession, there is now a specific ground for selling. You must give the tenant four months' notice. You can't use it in the first 12 months of a tenancy. And you normally can't let the property again for 16 months from serving the notice, which stops the ground being used as a back door to replace a tenant. Only use it if you are sure you are selling.

If the tenant hasn't left when the notice ends, you can't simply change the locks. You have to apply to the court for a possession order, within 12 months of the notice, and there will be a hearing. If the tenant still doesn't leave after the order, enforcement is by bailiffs. Each step adds time you can't easily predict.

Many tenants do leave when the notice ends, especially if you've kept them informed and they have somewhere to go. Some can't, because they are waiting on the council for rehousing. It's worth talking to your tenant early about timing rather than relying on the notice alone.

Viewings while the tenants live there

Selling with tenants in means buyers need to see a home someone is living in. Check what your tenancy agreement says about viewings. Arrange them in advance, at reasonable times, and with proper notice. A tenant has the right to live in their home without unreasonable disturbance, and a co-operative tenant is worth a lot to a sale.

Investors buying a tenanted house often need fewer viewings, and some will buy on the paperwork and one visit. That is one of the practical advantages of selling to someone who wants to keep the tenancy going.

What tenants do to the price

A tenanted house is mainly of interest to investors, because most people buying a home want to live in it. Fewer buyers usually means a lower price than the same house empty.

How much lower depends on the rent, the condition, the tenancy and the tenant. A long-standing tenant paying a fair rent, in a well-kept house with its paperwork in order, is attractive to an investor. A house with rent arrears, missing certificates or a difficult history is not.

Set that against the cost of getting the house empty. As an illustration only: on a house let at £1,200 a month, four months' notice keeps the rent coming in, but if the house then takes four months to sell empty, that's £4,800 of rent you no longer receive, plus council tax, utilities and insurance on an empty property. If the tenant doesn't leave on time, add the court process to that. Your own figures will be different, but the sum is worth doing.

Selling an HMO

If the house is a licensed house in multiple occupation, the licence does not pass to the buyer. HMO licences are personal to the licence holder, so a new owner has to apply for their own. Buyers of HMOs know this, but it's worth raising with the council and the buyer early so there is no gap in licensing after completion.

Tax when you sell a rented house

A rented house is not your home, so you will usually pay capital gains tax on any gain. For residential property the rates are 18% on gains within the basic rate band and 24% above it. The tax-free allowance is £3,000 for 2026 to 2027.

Your gain is broadly the sale price, less what you paid, less allowable costs such as the solicitor's and agent's fees on buying and selling and the cost of improvements like an extension. Routine maintenance and redecorating don't count.

You must report the sale to HMRC and pay any tax due within 60 days of completion. If you are selling several properties, the order and timing can make a difference to the total bill. Speak to an accountant before you commit to anything.

Your options

Sell tenanted through an agent who handles investment sales. Good for well-let houses with sound paperwork, where an investor will value the rent.

Serve notice, wait for the house to be empty, then sell on the open market. Usually the highest price, but the slowest route and the least certain, and you can't re-let for 16 months from the notice if you change your mind.

Sell to your tenant. Sometimes a tenant wants to buy and can raise a mortgage. It is worth asking, because it can be the simplest sale of all.

Sell at auction or directly to a buyer. Quicker, with one figure and no chain, usually at a lower price than a patient open-market sale.

If you have several properties, you don't have to do the same with all of them. Some may sell best empty and some tenanted.

Paperwork to have ready

• The tenancy agreement and any written terms given to the tenant
• The deposit protection certificate and scheme details
• The current gas safety record, electrical installation condition report and EPC
• A rent statement showing what has been paid and when
• Any notices you have served, and proof of how they were served
• An HMO or selective licence, if the house needs one