Plenty of landlords are reviewing their portfolios this winter. Higher mortgage rates and the property income tax rise due from April 2027 have pushed some to sell one or two properties, or to leave the sector altogether. If one of the homes you want to sell has a tenant living in it, the question comes up quickly: do I need it empty first?
The short answer is no. Since the Renters' Rights Act came into force on 1st May 2026, Section 21 has gone, so getting a property back now takes longer and has to follow set rules. That makes it more important to pick the right route before you start. Here are your four main options and how to decide between them.
First, what has changed
Under the old system, many landlords served a Section 21 notice, waited two months and sold with vacant possession. That route is closed. All private tenancies in England are now periodic, with no fixed end date, and a landlord who wants a tenant to leave must use one of the Section 8 grounds for possession.
There is a specific ground for selling, known as Ground 1A, but it comes with conditions and restrictions that did not exist before. If you are not yet familiar with the wider changes, our landlord guide to the Renters' Rights Act now it is live covers the essentials.
Option 1: sell with the tenant in place
Selling with a tenant in situ means the tenancy simply carries on under a new owner. Your buyer becomes the landlord on completion, takes over the tenant's deposit and collects the rent from then on.
Who buys: almost always another landlord or investor. With buy-to-let changing hands rather than disappearing, as we explored in our piece on landlord exits and portfolio consolidation, there is a steady pool of buyers looking for homes that already produce an income.
The upsides:
- No gap in rent while you wait for the property to empty
- No possession process, notice periods or restrictions to manage
- An investor can see the rent, the tenancy history and the yield on day one
- Your tenant keeps their home, which tends to keep goodwill (and viewings) on your side
The trade-offs: the buyer pool is smaller, because owner occupiers usually want vacant possession and their mortgage lenders often insist on it. Investors also price on yield, so you may achieve a little less than you would for the same home sold empty. A well-run tenancy with a reliable tenant, a protected deposit and a full set of safety certificates narrows that gap.
Paperwork to have ready: the tenancy agreement or written statement of terms, deposit protection details, the rent history, gas safety, EICR and EPC certificates, and the inventory. Your conveyancer will arrange for the deposit to move to the buyer, and our guide to tenancy deposit protection rules explains what that transfer involves.
Option 2: offer the property to your tenant
It is easy to overlook, but the person most familiar with your property already lives there. Some tenants have been saving for a deposit and would jump at the chance to buy the home they already know.
A sale to your tenant can be quick and cheap: no void period, no marketing and no viewings, and often no chain. Treat it like any other sale. Agree a price based on a proper valuation, ask both sides to instruct their own conveyancers and keep everything in writing. If the tenant needs a mortgage, they will apply as an ordinary buyer, and the tenancy ends on completion when they become the owner.
Even if your tenant says no, asking is a good opening to a conversation about your plans, which helps whichever route you take next.
Option 3: use Ground 1A to get vacant possession
If you are confident that a vacant property will sell for noticeably more, or you are selling to an owner occupier, you can seek possession using Ground 1A. It is a mandatory ground, which means a court must order possession if you prove you genuinely intend to sell and the notice was valid. But it has some important strings attached.
Timing: a Ground 1A notice cannot normally expire within the first 12 months of a tenancy.
Notice: you must give at least four months' notice, served on the prescribed Section 8 form. Our explainers on the Form 3 possession notice and how Section 8 works walk through the basics.
Deposit: a court will not grant possession on this ground if the deposit was not properly protected (or has not been returned).
The restricted period: once you serve the notice, you must not let or market the property for rent until 12 months after the notice expires. In practice that can mean up to 16 months in which you cannot re-let. If the sale falls through, you are left holding an empty property with no rental income.
Penalties for misuse: using the ground without a genuine intention to sell, or re-letting during the restricted period, can lead to fines of up to £40,000 and rent repayment orders, according to Shelter's legal guidance.
Ground 1A also does not guarantee a quick exit. If the tenant does not leave when the notice ends, you will need a court order, and court timescales vary. Build that into your sale plans and be cautious about agreeing a completion date with a buyer until you have possession.
Option 4: agree an early move with your tenant
Sometimes the simplest route is a conversation. A tenant may already be thinking about moving, or may be happy to leave sooner in return for help, such as a contribution towards removal costs, a rent-free final month or a prompt deposit return.
If you both agree, the tenancy can end by surrender: a mutual agreement that the tenancy ends on a set date. Put it in writing and make sure it is genuinely voluntary. Pressuring a tenant to leave, or hinting that they will be evicted anyway, risks crossing into harassment, which is a serious offence. If you are unsure, get advice before you raise it.
How to handle viewings while the tenant lives there
Whichever route you take, there will probably be a period where buyers need to see the property while your tenant is still at home. A few ground rules keep things smooth:
- Give proper notice: at least 24 hours in writing, as set out in most tenancy agreements, and agree times that suit the tenant
- Respect quiet enjoyment: your tenant has the right to live in the property without unreasonable interference, so avoid back-to-back viewings or turning up unannounced
- Keep the tenant informed: explain what is happening and roughly how long it will take; uncertainty is what tends to sour the relationship
- Be flexible on presentation: you cannot insist the home is staged for photos, but a polite request and perhaps a small thank you can go a long way
Our seller's guide to running a great viewing has more tips that work just as well in a tenanted home.
Don't forget the tax
Selling a rental property usually triggers Capital Gains Tax. You must report and pay any tax due within 60 days of completion, and a large gain can push part of it into the higher rate. Our guide to Capital Gains Tax when selling a buy-to-let explains the rates, allowances and deductible costs. It is worth speaking to an accountant before you agree a sale date, especially if you are selling more than one property.
Which option is right for you?
As a rough guide:
- You want a smooth sale and steady income until completion: sell with the tenant in place
- Your tenant is keen and able to buy: offer it to them first
- The property suits owner occupiers and will be worth much more empty: consider Ground 1A, but plan for a long timeline and the restricted period
- Your tenant is already planning a move: talk to them about an agreed surrender
For many landlords, selling with the tenant in place is the least stressful option, and the one that keeps rent coming in throughout.
Ready to sell, or keep letting?
If you have decided to sell, our flat-fee sell your home service can market your property to investors and owner occupiers alike, with or without a tenant in place. If you would rather hold on and make the property easier to run, our fully managed service takes the day-to-day off your plate, and if your property becomes vacant and you choose to re-let instead, our tenant find service will find you a new tenant quickly.
This guide covers properties in England and is general information rather than legal or tax advice.
