Blog / Landlords | 13 Mins Read

Selling a House with Tenants in Situ: A guide

By Nicola Heard | Created on 20th October 2025

Is it legal to sell a house with tenants currently living in it in the UK?

The short answer is yes, it is legal – though in practice, selling properties with tenants in situ can be more challenging. You need to find a particular type of buyer, which can make it harder to achieve a good selling price. However, many property investors are drawn to southeast London postcodes, so it’s perfectly possible if you know how.

Before you sell your buy-to-let property in Bow, Bermondsey or Surrey Quays, read our article to find out the truth about selling a house with tenants in situ.

What to consider when selling a house with tenants

When selling a tenanted property, you need to consider the condition of the home, its effects on property value, and the tenancy agreement in place with the current tenants.

1. Property value with or without tenants

Depending on demand levels in your area, the selling price could be lower with tenants in situ. Get to know your local market by consulting local estate agents. Tenanted properties tend to be in higher demand where there is a flourishing rental market, with many landlords looking to acquire another property for their portfolio.

2. Type of tenancy agreement

If you rent the property out under an assured shorthold tenancy agreement (AST), you must follow the correct guidelines and timescales. The buyer will want evidence that the tenant’s deposit has been placed in a deposit protection scheme, tenants have the Right to Rent, and that EPC, gas and electrical standards are met.

3. Does the property require substantial work?

Will the buyer need to carry out extensive renovations to bring the property up to standard? This is important, because buyers who choose a home with tenants in situ are probably looking for convenience – and not the awkwardness of renovating the house while it’s occupied by tenants.

4. Is the rental property furnished?

Is furniture included? Selling a furnished property with tenants usually means providing an inventory and agreeing on a price for the furniture.

5. Tenants’ rights during the sales process

Usually, tenancy agreements state that landlords have the right to expect tenants to allow viewings in the last months of the tenancy. At another stage of the tenancy, you may need to negotiate further. It is essential to preserve their rights when you sell a property with tenants living in it – you must follow the rules, give notice, and respect their right to refuse. A refusal from your tenants could seriously hamper your home sale, so find out where you stand before you begin the sales process.

Best areas to sell tenanted property in SE London

can you sell a house with a tenant in it

The best areas to sell a property with a sitting tenant are those on landlords’ radars, typically those offering excellent transport links and a great location. Canary Wharf has long appealed to property investors, Bow and Deptford generally offer good rental yields, and as cited by Lewisham Council, a quarter of the area’s households rent privately in well-connected Lewisham.

Alternatives to selling with tenants in situ

To avoid selling a rental property with a tenant in situ, sell with vacant possession or try a short-term let. Selling with vacant possession means you must evict your current tenants under a Section 21 notice while following the rules, and granting a two-month notice period.

Some landlords offer ‘cash for keys’, offering tenants money to move out to allow a sale with vacant possession. However, it’s important to avoid blundering into legal issues – never risk breaking the terms of the tenancy agreement and wider rental rules for a quick sale, and always consult your solicitor if you’re unsure about the legality of your actions.

Long-term tenancies are not the only way to rent out a property. Consider a short-term let while you prepare for the sale to generate rental income with greater flexibility.

Another alternative to selling a property with sitting tenants, is to sell the house to your tenants themselves. Whether it’s better than trying to sell the house with tenants is subjective – it may offer convenience, versus the chance of a higher selling price on the open market depending on demand.

Pros & cons of selling a house with a sitting tenant

Selling a house with tenants in situ can be challenging, but don’t discount it before considering the pros and cons:

Pros:

Quicker selling process – you can start the selling process faster because you don’t have to wait for the end of the fixed term or notice period.
No lost income – no loss of rental income while you wait to sell, and it if falls through, you can continue to collect monthly rent as usual.
Minimal updates – you don’t have to redecorate extensively before the sale as with a vacant property.
No void period – a tenanted property can be a safer choice from a security standpoint, and utilities can be kept in good working order.
Convenience for tenants – if you sell to another landlord, the tenants can remain in the property.
Proven rental yield – with purchase cost like stamp duty and fees in mind, the buyer can benefit from immediate rental income without advertising for tenants.
Reliability – the new owner benefits from ‘tried and tested’ sitting tenants, though will likely review the tenant profile, Right to Rent checks and current employment for due diligence.

Cons:

Limited pool of buyers – the property will only appeal to buy-to-let landlords, so you may achieve a lower selling price if most local buyers want to live there.
More complicated – there can be more loose ends with tenants in situ, like letting agent fees.
Furnished properties – it’s usual to leave the furniture when selling a property with sitting tenants.
Arranging viewings – selling a property with tenants living in it can be hard if uncooperative tenants refuse viewings, particularly if they’re worried that the buyer will evict them.
Additional paperwork – vendors must complete additional paperwork and provide repair requests, safety inspection documents and more.
House price – vacant properties tend to attract a higher price, especially for buyers at large. While you may get more for a tenanted property, this depends upon exposure to the right buyers.

How to sell property with tenants

In the UK, a landlord can sell a house with a tenant in it by auction or with an agent. Ask local estate agents whether you could achieve a better price by marketing it to owner-occupiers versus selling a house with a sitting tenant. Their market knowledge can be invaluable. Local agents can contact prospective buyers seeking a tenanted rental property and list your property on their website and online property portals to reach more potential buyers.

To sell a house with tenants in situ at auction, you will agree a guide price with the auctioneer, and the winning bid is accepted on auction day. You can achieve a quick sale, but they don’t reach as many buyers, which can limit the house price you achieve. You will also pay auction fees, which are typically higher than estate agent fees. That said, you will likely be presenting your property to the right kind of buyers – buy-to-let landlords.

Process of selling tenanted property

If you’re confident in the pros and cons, this is how to sell a house with a sitting tenant.

Communicate – make your tenants aware that you’re selling the property.
Find an estate agent – arrange an experienced local agent to handle the selling process.
List the property – market the property as a house with sitting tenants.
Viewings – inform your tenants ahead of viewings, while respecting their rights.
Accept an offer – once you’ve accepted an offer, your solicitor will negotiate the sale.
Complete – transfer the property and tenancy documents to the new owner. Note that landlord licences in areas such as Southwark cannot be transferred to another licensee.

Selling a home with tenants in situ FAQ

Can I legally sell my property with tenants still living in it?

Yes, you have the legal right to sell your property with tenants in situ. The tenancy agreement transfers to the new owner, who becomes the new landlord upon completion. Your tenants’ rights remain unchanged – they cannot be evicted simply because the property is being sold. The new owner must honour the existing tenancy agreement, including its terms, rent amount, and deposit protection. In south east London’s competitive rental market, this continuity can actually be attractive to investment buyers seeking immediate rental income.

How much will having tenants affect my property’s sale price?

Properties with sitting tenants can sometimes sell for 15-25% below vacant possession value in south east London. However, the exact discount is highly dependent upon several factors: the remaining lease term (longer leases mean bigger discounts), the rental yield (properties in areas like Greenwich or Lewisham with strong yields may see smaller discounts), the tenant quality and payment history, and current market conditions. However, you’ll save on void periods, council tax, and utilities during the sale process. Investment buyers particularly value properties in transport zones 2-4 with good yields, which can minimise the price impact.

What notice do I need to give my tenants about the sale?

Legally, you’re not required to give tenants advance notice of your intention to sell, but you must provide 24 hours written notice before viewings. Best practice in south east London involves informing tenants early to maintain goodwill, as cooperative tenants make viewings easier. You should explain that their tenancy is protected and will continue with the new owner. If you want vacant possession instead, you must serve proper notice: Section 21 requires 2 months’ notice (for assured shorthold tenancies), while Section 8 requires specific grounds and notice periods varying from 2 weeks to 2 months.

Who will buy my tenanted property – is the buyer pool limited?

Your buyer pool is primarily professional landlords and investment companies, which is substantial in south east London. Buy-to-let investors actively seek tenanted properties for immediate income generation, especially in areas with good transport links like (e.g.) Woolwich (Crossrail), Deptford, and Peckham. Professional portfolio builders value proven rental income and reliable tenants. However, you’ll exclude owner-occupiers and most first-time buyers who need vacant possession. The investment buyer market in SE London is particularly strong for properties near stations on the Overground, DLR, and main rail lines into London Bridge and Victoria.

What are the tax implications of selling with tenants versus vacant possession?

The tax treatment remains largely the same, with Capital Gains Tax (CGT) applying to any profit above your purchase price plus allowable expenses. Current CGT rates for residential property are 18% (basic rate) or 24% (higher rate) on gains exceeding the £3,000 annual allowance. Selling with tenants may actually provide tax timing benefits: you can potentially defer the sale to a more tax-efficient tax year, and continuous rental income until completion helps offset any CGT liability. Keep records of all improvements and selling costs as these reduce your taxable gain – and always get professional financial advice to confirm the taxes you need to pay.

How do viewings work with tenants in the property?

Viewings require careful coordination and must respect tenants’ ‘right to quiet enjoyment of the property’. You must give 24 hours written notice for each viewing (email is acceptable if previously used for communication). Tenants can refuse viewings at unreasonable times but cannot unreasonably withhold access. Best practice includes: scheduling viewing blocks to minimise disruption, offering rent reductions for cooperation, ensuring the property is presentable, and considering virtual tours first. In south east London’s competitive market, limiting physical viewings to serious, financially verified buyers helps maintain tenant cooperation.

Should I wait for the tenancy to end before selling?

This depends on your specific circumstances and local market conditions. Consider selling with tenants if: you need immediate sale proceeds, the tenancy has 6+ months remaining, your tenants are reliable with good payment history, or you want continued rental income during the sale. Wait for vacant possession if: the tenancy ends within 2-3 months, you can afford the void period, the property needs refurbishment, or local owner-occupier demand is strong. In areas like Blackheath or Dulwich where family homes are in high demand, vacant possession often maximises value.

What documents do I need to provide to buyers about the tenancy?

Comprehensive documentation is essential for a smooth sale and to demonstrate professional management. Required documents include: the current tenancy agreement and any amendments, rent payment history (minimum 6-12 months), deposit protection certificate and prescribed information, Gas Safety Certificate (annual), Energy Performance Certificate (EPC), Electrical Installation Condition Report (EICR, every 5 years), recent property inspection reports, and building insurance details. Having these organized demonstrates professional management and can actually increase buyer confidence, particularly important for south east London’s sophisticated investment market.

Can my tenants block or delay the sale?

Tenants cannot legally prevent the sale, but uncooperative tenants can create practical difficulties. While they must allow reasonable access for viewings with proper notice, they can make the process challenging by refusing convenient viewing times, presenting the property poorly, or expressing negativity to potential buyers. Minimise resistance by: communicating openly about the sale process, reassuring them about their rights, offering incentives for cooperation (rent reduction or moving assistance), and maintaining good relationships throughout. In extreme cases of obstruction, you may need to consider Section 21 notice, though this delays the sale by 2-4 months minimum.

What happens to the tenant’s deposit when I sell?

The deposit must be properly transferred to the new owner, who becomes responsible for its protection and return. The practical process involves: agreeing the deposit transfer method in the sale contract (either direct transfer or adjustment in completion statement), notifying the deposit protection scheme of the ownership change within 30 days, providing the new owner with all deposit-related documentation, and ensuring tenants receive prescribed information from the new owner. Failure to properly transfer deposit protection can result in penalties of 1-3 times the deposit amount. Most south east London property solicitors are familiar with this process, but always confirm it’s explicitly covered in the sale contract.

Conclusion

Selling a house with tenants in situ is not always easy, but there are always options open to you ensure you have everything in place before starting your sale, from notifying the right people to having the right landlord certificates in place.

Thinking about selling a property in Southwark or Canary Wharf? Contact us to discuss your rental property with local estate agents who understand the southeast London property market, and can find out what your home is worth if you are considering a sale.

Letting Property?

Begin with a FREE, rental valuation today.

Got Questions?

Want to discuss something specific?
Contact us & we will be happy to help you.

Nicola Heard

I have spent 29 happy and eventful years at Oliver Jaques and have enjoyed building a fantastic rapport with our clients, some of whom still entrust us with their property portfolios 20 years on. Having grown up locally living in Bermondsey and attending Aylwin Girls' School, I have a unique insight into the needs of the people moving into the area, and I am one of the few Directors in the industry who can be can be found every day working closely with the staff, striving for the business to continually grow and exceed expectations. I enjoy giving back to my community and hope to continue to be able to do so for many years to come.

What Certificates Do Landlords Need in South London?

Landlords | 8 Mins Read

Selling a House with Tenants in Situ: A guide

What to consider when selling a house with tenants