Selling a Tenanted Property

Note on where this guide applies. Housing and rental law is devolved across the UK. The Renters’ Rights Act 2025 applies to England only. Wales has its own renting framework under the Renting Homes (Wales) Act 2016. Scotland already operates a separate system, with periodic Private Residential Tenancies and a ban on no-fault evictions in place since 2017. Northern Ireland has not adopted the Renters’ Rights Act and continues to follow its own private rental law, with separate reform discussions ongoing. This guide focuses on England.

If you’re a landlord in England thinking about selling a rental property, the rules have changed. The Renters’ Rights Act 2025 came into force on 1 May 2026, and it has reshaped the way landlords can recover possession of a tenanted property for the purpose of sale. Section 21 ‘no-fault’ evictions are gone. Fixed-term tenancies have been replaced by rolling periodic tenancies. And there is a new mandatory ground for selling, called Ground 1A, with a 12-month re-letting restriction attached to it.

This guide explains, in plain terms, what selling a tenanted property looks like under the new regime: your two main options, when each makes sense, the practical traps to watch out for, and where auction fits as an alternative to a private treaty sale.

In this guide:

Quick answer: can I still sell a tenanted property?

Yes. You have two routes:

1. Sell with the tenant in place. The tenancy transfers to the new owner, who becomes the tenant’s landlord. You don’t need to serve notice or recover possession. The buyer audience is restricted to investors, but the sale process itself is unaffected by the Renters’ Rights Act.
2. Sell with vacant possession. You serve notice on the tenant under Ground 1A, wait for them to leave, then market the property to the wider buying public including owner-occupiers. Vacant properties typically achieve a higher price, but Ground 1A comes with conditions and a 12-month re-letting ban.

Which is right for you depends on your timeline, your tenant, the type of property, and how much risk you’re willing to carry on void periods. The rest of this guide walks through the detail.

How the Renters’ Rights Act 2025 changed selling a tenanted property

The Renters’ Rights Act received Royal Assent on 27 October 2025, and most of its core provisions came into force on 1 May 2026. The headline changes affecting landlords looking to sell are:

• Section 21 ‘no-fault’ evictions are abolished. Landlords can no longer end a tenancy without giving a specific legal reason.
• All assured shorthold tenancies (ASTs) are now Assured Periodic Tenancies (APTs). Fixed terms (the typical 6 or 12-month agreement) no longer exist. Every tenancy is open-ended and runs month-to-month, with no end date.
• Tenants give two months’ notice to leave (up from one month).
• Rent increases now have to follow the statutory Section 13 process, with a maximum of one increase per year and at least two months’ notice. Contractual rent review clauses are no longer enforceable.
• A new set of grounds for possession applies under Section 8. The most relevant for landlords selling is Ground 1A.

The practical effect for landlords is a loss of flexibility. The old approach of granting a 12-month AST, deciding later whether to renew or sell, and using a Section 21 notice if needed, is no longer available. Tenancies are now harder to end, and selling with vacant possession requires more planning.

What this means in real life

If your rental income just about covers the mortgage and service charges, and your costs have gone up, your obvious move would be to put the rent up. Under the new rules, you can still increase the rent, but only once a year, only via a Section 13 notice, and only to the open market rate. The tenant has the right to challenge the increase at the First-tier Tribunal, which cannot set a rent above market level.

For some landlords, that’s enough to tip the maths. The property no longer washes its face, the option to raise rent is constrained, and selling becomes the more sensible choice. The question then is how to sell.

Sometimes it can be easier to sell a tenanted property as is, without serving notice on the tenant to vacate. And there are plenty of property investors looking for “already tenanted” properties at auctions throughout the UK.

Ground 1A: the new mandatory ground for sale

Ground 1A is the route to recovering vacant possession when you genuinely intend to sell. The key features:

• It’s a mandatory ground. If you can prove to the court that you genuinely intend to sell, the judge has no discretion to refuse possession. This is a meaningful protection for landlords compared with discretionary grounds, where a judge weighs reasonableness.
• You must give the tenant at least four months’ notice. This is the minimum.
• The notice cannot expire in the first 12 months of the tenancy. This is the ‘protected period’. So if your tenancy is six months old, your four-month notice would expire too early and would not be valid. You’d need to give a longer notice so it expires after the 12-month mark.
• Once you’ve served notice, you can’t re-let or market the property for letting for around 12 months after the notice period ends. This is the re-letting restriction (more on this below).

A landlord doesn’t have to wait until the tenancy is 12 months old before serving notice. You can serve notice from the eight-month mark so that the four-month notice period expires at the 12-month point. But the notice itself must be valid, and it must follow the prescribed Section 8 form.

What evidence do I need to show I’m genuinely selling?

The Act doesn’t spell out exactly what evidence is required, and judges will decide on a case-by-case basis. In practice, the kind of paper trail that helps includes:

• A written instruction to an estate agent or auctioneer
• A property valuation in writing
• Marketing particulars or auction listing
• Correspondence with a conveyancer or solicitor

The earlier and more clearly you document your intention to sell, the stronger your position if it ever ends up in court.

The 12-month re-letting restriction

When you serve a Ground 1A notice, you commit to genuinely selling. If you change your mind, or the sale falls through, you cannot put the property back on the rental market for around 12 months after the notice expires. In practice, that’s roughly 16 months from the date you served the notice (the four-month notice period plus the 12-month restricted period that follows it). Marketing the property for re-letting during this window is a criminal offence and can lead to enforcement action by the local authority. The restriction does not apply if you sell the property and the new owner decides to let it out, because that’s a new landlord.

Other grounds for possession that might be relevant

Ground 1A is the route most selling landlords will use. There are other grounds that can also lead to vacant possession in specific circumstances:

• Ground 8 (Rent arrears, mandatory). Now requires the tenant to be in at least 13 weeks’ arrears (up from 8 weeks) at the date of both notice and hearing. Notice period is four weeks. Stricter than before, so harder to rely on.
• Ground 9 (Suitable alternative accommodation, discretionary). The judge weighs reasonableness.
• Ground 10 (Some rent arrears, discretionary). Lower threshold than Ground 8 but discretionary.
• Ground 11 (Persistent rent arrears, discretionary).
• Ground 12 (Breach of tenancy, discretionary).
• Ground 14 (Antisocial behaviour, discretionary).

Discretionary grounds give the court room to refuse possession even if the ground is technically made out. They are also harder to combine with a stated intention to sell. If you’re using a tenant-fault ground purely as a route to a sale, expect more scrutiny. Ground 1A is the cleaner route for sale-driven possession.

For full official guidance on grounds and notice periods, see GOV.UK’s guide for landlords and letting agents.

Two common situations landlords find themselves in

Situation 1: Your tenant has given notice. Do you re-let, or do you sell?

When the tenant decides to leave, you get a clean window. You don’t need to serve Ground 1A. There’s no protected period to worry about. You aren’t triggering the 12-month re-letting restriction. The choice is simply: do you re-let, or do you take the chance to sell with vacant possession?

We expect more landlords to take the selling route in this scenario, simply because the new rules make it harder to engineer this kind of clean exit later on. If you re-let now, you’re locked into another tenancy where any future sale will need to navigate Ground 1A and the re-letting ban.

That said, selling isn’t free. Things to weigh up before going to market vacant:

• Lost rental income. From the moment the tenant moves out, you’re covering the mortgage and other costs from your own pocket.
• Service charges and ground rent for leasehold flats keep running regardless of who’s living there.
• Insurance gets more expensive. Most insurers charge a higher premium for unoccupied properties, often with conditions about checking the property weekly and turning the water off.
• Condition and presentation. A vacant property exposes everything. Tired carpets, dated kitchens, marks on walls. You may need to spend money to bring it up to a marketable standard.
• Pressure from your letting agent to put a new tenant in straight away, which we’ll come back to below.

If the property is in good condition, in an area where vacant properties sell well, and your figures work without rental income for a few months, taking the vacant route can make sense. If any of those things are uncertain, selling with the tenant in place (or putting it to auction quickly) reduces the risk.

Situation 2: You need to sell, and the tenant is staying put

Here you have a choice between two routes:

1. Sell with the tenant in place (no notice served, no Ground 1A).
2. Serve notice under Ground 1A to recover vacant possession before you sell.

Selling with the tenant in place is usually the simpler path. You avoid Ground 1A entirely. You avoid the 12-month re-letting restriction. You keep rental income flowing during the marketing and sale process. The trade-off is a smaller buyer audience: investors only.

Selling vacant gives you access to owner-occupiers, who typically pay more. The trade-off is the cost and risk of using Ground 1A: four months minimum notice, the protected period if the tenancy is new, the re-letting restriction if the sale falls through, and a void period during marketing.

For many landlords, especially those with steady tenants and a property that suits investors (e.g. a flat in a strong rental area), selling with the tenant in place is the easier and lower-risk option, even at a slight discount. For property types where the value gap between vacant and tenanted is large (e.g. family houses where most buyers are owner-occupiers), the vacant route may justify the additional steps.

Practical tip: don’t serve notice too early

A practical point that’s easy to miss. You don’t need to serve notice before putting the property on the market. Nothing in the Renters’ Rights Act stops you from listing a tenanted property for sale, with the tenant in situ, while you decide what to do.

A sensible sequence for many landlords is:

1. List the property (with the tenant in place) and start marketing.
2. See what level of interest you get from investor buyers and at what price.
3. If you’re confident a sale will complete with the tenant in place, do that.
4. If a sale stalls or you decide vacant possession will achieve substantially more, then serve a Ground 1A notice.

Serving notice early triggers the four-month clock and locks you into the 12-month re-letting restriction. If you serve notice and the sale doesn’t happen, you can’t retreat back to letting. Hold the notice in reserve until you really need it.

This is also one of the reasons auction can fit well: a four to six week marketing window followed by a fixed sale date means you have certainty before you commit to anything irreversible with the tenant.

What if the tenant says they want to buy the property?

This comes up regularly. Tenants will sometimes say they’re interested in buying. Sometimes they genuinely are. Sometimes it’s a delaying tactic to stay in the property longer. It’s hard to tell which from the outside, so the practical answer is the same in both cases: set a deadline.

A workable approach:

1. Give the tenant first refusal at a fair price, in writing.
2. Set a clear deadline for them to provide a mortgage agreement in principle (or proof of cash funds) and instruct a solicitor.
3. If they hit the deadline, work towards a sale.
4. If they miss it, the property goes to market. The tenant is welcome to participate as a regular buyer alongside everyone else, including bidding at auction.

Auction works particularly well for this. Telling the tenant “if you want the property, you can bid for it on auction day like anyone else” is fair, transparent, and removes the ambiguity. There’s no negotiation to drag out, no excuse to delay. The price is set by the market on the day.

Should I appoint my letting agent to sell?

If a letting agent has been managing the property, they’re often the obvious first port of call. They know the property, they know the tenant, they can arrange viewings without disruption. Some letting agents also have a sales arm, or have investor contacts who might buy the property off-market.

There’s a reasonable argument for using them, but there’s also a conflict of interest worth being aware of. A letting agent’s ongoing income comes from managing tenancies. Once the property is sold, that monthly fee stops. Over the longer term, a letting agent is financially better off if the property carries on being rented than if it’s sold, even with a one-off sales commission factored in.

This shows up in two ways:

• A letting agent may quietly steer you towards re-letting rather than selling, especially if your tenant has just given notice. Watch for the pitch that “now’s not the right time to sell, why don’t we just put a new tenant in for 12 months and revisit it”.
• A letting agent who does take on the sale may be slower or less proactive than a sales-focused agent, simply because they have less to gain from a quick sale.

This isn’t to say every letting agent is conflicted, or that you shouldn’t use them. It’s a flag to ask the question: “Are you giving me the same advice you’d give if your management fee wasn’t on the line?” If you can have that conversation honestly, fine. If not, get a second opinion from a sales-only agent or an auctioneer.

What investors look for in a tenanted property

If you’re selling with the tenant in place, you’re selling to investors. Knowing what they care about helps you present the property in the right light and price it sensibly. Four things matter most:

• Rental income and yield. This is the biggest single factor for most investors. Yield is the annual rent divided by the purchase price, expressed as a percentage. As a rough benchmark, anything above 5% gross yield in London or 8% to 9% elsewhere in the UK tends to attract attention. Investors will also factor in the increased buy-to-let mortgage costs and the 5% Stamp Duty surcharge they’ll pay on top of standard rates (more on that below) when working out what they can afford to pay.
• Strength of the tenant. A tenant with a long, clean history of paying on time is an asset. Recent rent arrears, complaints, or a short tenancy with limited history will pull the price down.
• Property type. Some property types are harder to finance with a buy-to-let mortgage, which restricts the buyer pool. Examples include high-rise ex-local authority flats, properties above commercial premises, short-lease flats, and flats in buildings with cladding issues. These can still sell, but the buyer audience is smaller and prices are typically lower.
• Capital appreciation potential. Some investors care more about the long-term capital growth than the short-term yield. London and parts of the South East are popular for this reason, even where yields are modest.

The legal pack matters too. A buyer who can see a clean tenancy agreement, an up-to-date Gas Safety Certificate, EPC, deposit protection certificate, and details of any rent reviews will pay more confidently than one looking at a thin pack. If you don’t have all of this in order, get it sorted before going to market. It’s the single biggest thing you can do to improve the price.

What price will my tenanted property sell for?

There’s no single answer, but the framework for thinking about it is straightforward.

A tenanted property typically sells for less than the same property would sell for vacant. The size of that gap depends on:

• The yield. Higher yield narrows the gap.
• The property type. A flat in an investor-heavy area might have almost no gap. A family house in an owner-occupier area might have a significant one.
• The tenant. A long-term, well-paying tenant in a sensible rent narrows the gap. A problem tenant or an under-market rent widens it.

Investors price properties around the yield they expect to achieve, net of costs. Their costs are also higher than they used to be:

• 5% Stamp Duty surcharge on additional residential properties. This was increased from 3% to 5% on 31 October 2024 and applies on top of the standard SDLT rates. On a £300,000 buy-to-let, that’s an extra £15,000 over what an owner-occupier would pay.
• Higher buy-to-let mortgage rates compared to residential mortgages.
• Service charges and ground rent for leasehold flats, which can be substantial.
• Letting agent fees, insurance, repairs, and void allowances.

When you ask an agent or auctioneer for a valuation, ask them to break down their reasoning. A sensible valuation will reference comparable tenanted sales, current yields for the area, and an honest view of the buyer audience.

Selling a tenanted property at auction

Auction is well suited to tenanted property for several reasons. It’s worth understanding why before you make a decision.

Auction protects you from price chipping

When you sell through a private treaty (the standard estate agent route), you typically agree a price with one buyer and then go through a long pre-exchange process. During that process, the buyer has time to arrange surveys, query things in the legal pack, and use any of it as a reason to push the price down at the last minute. This is sometimes called gazundering. It’s particularly common in tenanted sales because investor buyers are more numerate and more willing to walk away.

At auction, the contract is binding from the moment the hammer falls (or the equivalent in a digital or modern method auction). The legal pack is published before the auction, so any issues are factored into bids in advance. There’s no last-minute renegotiation, no “I’ve had a survey back and I want £15,000 off”. The price you see is the price you get.

A wider buyer pool, all in one place

Auctions attract investors. That’s their core audience. A national auction with a tenanted lot will typically draw bids from buyers across the country, not just locally. That competitive tension is what produces a fair market price on the day.

“But auction means viewings won’t happen with my tenant in place”

A common misconception. Investor buyers at auction often don’t need access to the property. Many are happy to bid based on the legal pack, the tenancy details, and an external viewing, especially if the lot is well documented. Where viewings are needed, they’re typically grouped into a couple of organised slots rather than the open-ended viewings of a private treaty sale. This is far easier on the tenant.

Speed and certainty

A typical auction marketing period is four to six weeks. Once the hammer falls, completion is usually 28 days later (sometimes longer for modern method auctions). For a landlord trying to make a clean decision, that timeline is helpful.

If you’d like to understand the auction process step by step, our seven-stage guide to selling at auction walks through exactly how it works. Our costs page explains what you’ll pay, and our guide to auction reserve prices covers how the reserve protects you from selling below the price you’ve agreed.

What if my tenant won’t leave after the notice expires?

If you’ve served Ground 1A notice, the four months pass, and the tenant doesn’t leave, the next step is to apply to the County Court for a possession order. The court will list a hearing, the landlord presents the case, and if the ground is made out, the judge issues a possession order. If the tenant still doesn’t leave after that, the landlord applies for a warrant of possession, which is enforced by County Court bailiffs.

In practice, the court process can take several months. There have been well-documented backlogs in the County Court, and timelines have been getting longer in recent years. This is one reason to think carefully before serving notice: if a sale is contingent on vacant possession by a particular date, the court process may not deliver that on time.

For the official process, see GOV.UK guidance on going to court to evict a tenant.

Capital Gains Tax: don’t overlook this

Capital Gains Tax (CGT) is one of the most commonly overlooked costs when selling a tenanted property. If the property has never been your main home, it isn’t covered by Private Residence Relief, and any gain since you acquired it is potentially taxable.

The rates for residential property gains in 2026/27 are:

• 18% for basic rate taxpayers (on gains that fall within your unused basic rate income tax band)
• 24% for higher and additional rate taxpayers

You also get an Annual Exempt Amount of £3,000 per individual per tax year. Anything above that is taxable.

A few practical points:

• The 60-day rule. When you sell a residential property that isn’t your main home, you have to report and pay any CGT due within 60 days of completion. This is a separate online filing through HMRC, not part of your annual tax return. Missing the deadline triggers an automatic £100 penalty plus interest.
• Couples. If the property is jointly owned, both owners get their own £3,000 allowance, doubling the exempt amount.
• Costs you can deduct. The original purchase price, Stamp Duty paid when you bought it, legal fees on purchase and sale, agent or auctioneer fees, and the cost of capital improvements (extensions, new kitchens with structural change, but not routine repairs).
• Partial Private Residence Relief. If the property was at any point your main home, you may qualify for partial relief covering the period you lived there, plus the final nine months of ownership.

If you’re an ‘accidental landlord’ (you ended up letting out a property that was once your home, perhaps because you couldn’t sell it or moved in with a partner), the CGT position can be more favourable than for a long-term buy-to-let landlord. Either way, before you exchange contracts, get a tax adviser to run the numbers. The figure can be material, and there are legitimate planning options (timing across tax years, transferring a share to a spouse, claiming improvements properly) that only work if you act before the sale completes.

If you’re selling a UK property while living abroad, there are additional rules for non-residents, and the 60-day reporting deadline applies even if you have no UK tax to pay.

This is general information, not tax advice. Speak to a qualified accountant or tax adviser about your circumstances.

Recap: the key things to remember

If you take nothing else from this guide, take these:

1. You can still sell a tenanted property in two ways: with the tenant in place (to investors) or with vacant possession after serving Ground 1A notice (to the wider market).
2. Ground 1A is your route to vacant possession. It needs four months’ minimum notice, can’t expire in the first 12 months of the tenancy, and triggers a roughly 12-month re-letting ban from when the notice expires.
3. You don’t have to serve notice before going to market. Hold notice in reserve until you have a buyer or are committed to selling vacant.
4. Selling with the tenant in place is often the simplest route, especially for flats in investor areas where the price gap to vacant is small.
5. Be alert to the conflict of interest if your letting agent is advising you on whether to sell or re-let.
6. Investors price on yield, not sentiment. Get your legal pack and compliance documents in order before going to market and you’ll get a better price.
7. Auction protects you from price chipping and reaches the right audience for tenanted property.
8. CGT is your problem, not the buyer’s. Plan for it, file within 60 days of completion, and take advice early.

If you’d like a free, no-obligation auction sale price estimate for your tenanted property, get in touch. We’re always happy to talk through the options before you decide on a route.

Frequently Asked Questions

Can I sell my property with a tenant living in it?

Yes. You can sell a tenanted property at any time without serving notice on the tenant. The tenancy simply transfers to the new owner on completion, and they take over as the landlord. The buyer audience is restricted to investors rather than owner-occupiers, but the sale process itself is unaffected by the Renters’ Rights Act.

Do I have to give my tenant notice before putting the property on the market?

No. There is no legal requirement to serve notice before listing the property for sale. In fact, holding off on notice is often the smarter approach. Serving a Ground 1A notice triggers a four-month clock and locks you into a 12-month re-letting restriction, so it makes sense to wait until you have a buyer or are firmly committed to selling with vacant possession.

How much notice do I have to give my tenant under Ground 1A?

The minimum notice period is four months. The notice must also not expire during the first 12 months of the tenancy (the ‘protected period’), so for newer tenancies the notice may need to run longer than four months to be valid. Notice must be served on the prescribed Section 8 form citing Ground 1A.

Can I serve notice in the first 12 months of a tenancy?

You can serve the notice itself, but it cannot expire during the first 12 months of the tenancy. In practice this means you can serve a Ground 1A notice from around the eight-month mark so that the four-month notice period runs out just after the 12-month protected period ends. For tenancies in the first eight months, the notice would need to be longer than four months to be valid.

If I serve notice to sell, can I change my mind and re-let the property?

No, not for a significant period. Once a Ground 1A notice is served, you are prohibited from re-letting or marketing the property for letting for around 12 months after the notice period expires. That works out at roughly 16 months from the date you served the notice. Marketing the property for re-let during this restricted period is a criminal offence. The restriction does not apply if you sell the property and the new owner decides to let it out, because they are a new landlord.

Will my tenanted property sell for less than a vacant one?

Usually yes, but the size of the gap depends on the property. With a tenant in place, your buyer audience is limited to investors, and investors price on yield. A flat in a strong rental area with a good tenant and yield may sell for close to vacant value. A family house in an owner-occupier area is likely to sell for noticeably less than it would vacant. The 5% Stamp Duty surcharge on additional properties also affects what investors can afford to pay.

Can I sell a tenanted property at auction?

Yes, and auction is often particularly well suited to tenanted property. Auctions attract investor buyers, the legal pack is published in advance so issues are factored into bids rather than used to renegotiate later, and the sale is binding on the day. Viewings can usually be grouped into a couple of organised slots, which is far less disruptive for the tenant than an open private treaty marketing campaign.

My tenant says they want to buy the property. What should I do?

Give them first refusal at a fair price in writing, but set a clear deadline. Ask for a mortgage agreement in principle (or proof of cash funds) and confirmation they have instructed a solicitor by a specific date. If they hit the deadline, work with them on a sale. If they miss it, take the property to market, and let them know they can still bid for it at auction alongside everyone else. This protects you from a tenant using a stated interest in buying as a tactic to delay vacating.

Will I have to pay Capital Gains Tax when I sell?

If the property has never been your main home, any gain since you bought it is potentially taxable. The rates for residential property in 2026/27 are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers, with a £3,000 annual exempt amount per individual. CGT must be reported and paid within 60 days of completion through HMRC’s online service. Take advice from a qualified accountant before you exchange contracts, as some planning options only work before the sale completes.

What happens if my tenant refuses to leave after the notice expires?

You apply to the County Court for a possession order. If the court grants the order and the tenant still doesn’t leave, you then apply for a warrant of possession, which is enforced by County Court bailiffs. The whole process can take several months, so factor this into your timeline if your sale depends on vacant possession by a specific date. See GOV.UK guidance on evicting tenants for the official process.