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HouseWorth
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  1. Blog
  2. How to sell a house you're renting out
House selling tips
04 February 2020

How to sell a house you're renting out

Rosie Hamilton
Writer & Researcher
group of young flatmates toast each other over large dining table

Table of contents

  1. 1. Deciding to sell with tenants or without
  2. 2. Viewings
  3. 3. Deposits

The past few years have been a period of great uncertainty for landlords. On one side there have been significant changes to stamp duty obligations, and a reduction in tax relief for those with more than one property. On the other, the uncertain nature of the property market in the wake of Brexit and government changes has caused a rise in the number of ‘accidental landlords’.

Because of this, lots of landlords are now taking the step of selling their rental properties. But what if you’re part way through a tenancy? Should you go ahead with selling whilst your tenants are still living there?

Deciding to sell with tenants or without

Once you know you want to sell your property, you’ll need to decide whether to go ahead whilst your tenants are still living there. If you’d prefer to sell without tenants you'll either have to wait until the end of their contract, or begin the process of a legal eviction using ‘Section 21’.

[N.B. Section 21 is currently in the pipeline to be abolished, but is still currently an available route for landlords.]

Before you make the decision, take into account your personal and financial circumstances, and the conditions of the property market in your area.

If you sell your property with tenants, you'll continue receiving your rental income for the whole time that you're looking for a buyer. On top of this, already having good tenants can make your property more appealing to landlords looking for an easy investment. This can be a real positive if the property market in your area is slower moving than average.

However, if buyers in your area are quite active, it might be better to sell your property without tenants. An untenanted property will have a wider appeal, and attract interest from those looking to buy-to-let and those looking for a main residence. This means it's likely to sell quicker than a property marketed solely to landlords and investors.

An experienced local estate agent will be invaluable in providing the advice you need to make this decision. Their extensive local expertise will give them a sense of how easy it’ll be to sell to another landlord. Or, whether it makes more sense to target buyers looking for a new home. They’ll also be able to tailor their advice depending on your needs - whether that’s getting the best price, or selling as quickly as possible.

Find the agent best-suited to your sale in a couple of clicks with our nifty comparison tool.

Viewings

If you’ve decided that you want to sell whilst your tenants are still in residence, you’ll need to think about how to schedule viewings and valuations. This will be slightly more complicated than if you were selling an empty property or your own home. You won’t have control over things like how tidy the place will be. And, you need to maintain a good relationship so your tenants don’t make the sale more stressful.

There should be a term in your contract that specifies how much notice you need to provide before entering your property. It will usually be 24-48 hours. You and your chosen estate agent will need to respect this when booking in viewings, valuations or surveys. If there isn’t a specific term about viewings in the tenancy agreement, you must ask your tenant’s permission first before entering the property. When there's no specific clause they have the right to object to viewings. But, if your relationship is amicable, it is likely they will be understanding.

It’s also important to bear in mind your tenant’s ‘right to quiet enjoyment’ of their property. This is a tenant’s right to enjoy the premises they rent ‘in peace and without interference’. Although there's no specific definition of what the parameters are, lots of viewings at unsocial hours (late evening, early morning, or weekends) could be seen as a breach of this right.

Make sure you have open and regular communication with your tenant, and take their needs into consideration. Their attitude to you and the house sale can have a large impact on how quickly and easily you will sell. If you're on good terms, it’s more likely that your tenant will be flexible on timings and ensure the house is tidy when potential buyers come round.

Deposits

Once you’ve found a buyer for your tenanted property, the conveyancing process is essentially the same as for any other sale. The key difference is that you have to make sure that your resident’s deposit remains protected during the transfer of ownership. It can help to have a lawyer with specific experience in selling rental properties, as they will handle all of this for you.

In England and Wales a tenant’s deposit is protected by either an ‘insured’ or a ‘custodial’ scheme. If you have used an insured scheme you form an agreement to pass the deposit to the buyer, who will then need to re-protect it.

With custodial protection, the buyer will register an account with the scheme, and you then request the transfer of deposit into the buyer’s scheme account. In Scotland, custodial schemes are the only option for deposit protection.

For more advice on preparing to sell, including how to pick a conveyancer, check out our handy guides.

Ready to make the move? Finding an estate agent with the right experience is the first step. See the top performers in your area.

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  • Data-driven
  • No obligation

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