How to Sell a House with Sitting Tenants in London

Yes — you can sell a house with sitting tenants in London, and you do not need to evict them or wait for the tenancy to end first. When you sell with the tenant in situ, the buyer takes over the existing assured shorthold tenancy, the tenant carries on paying rent under the same terms, and only the landlord on the title changes. This guide explains what a sitting tenant actually is, the law around the AST and deposit transfer, what the discount to vacant value really reflects, how the Renters' Rights Act 2025 changes the picture, and the routes open to you.

If you want the broader route-by-route comparison — open market, direct-to-investor and selling vacant — see our companion guide on how to sell a tenanted property in London. This article focuses specifically on the sitting-tenant relationship and what it means for a sale.

What does "sitting tenant" actually mean?

The phrase carries two different meanings, and the difference matters enormously to value.

The historic meaning: a protected (Rent Act) tenant

Strictly speaking, a "sitting tenant" once meant a tenant with a regulated or protected tenancy under the Rent Act 1977 — lifetime security of tenure and a controlled "fair rent" well below market. A house with a genuine Rent Act tenant can sell for a steep discount because the new owner cannot easily recover possession or charge a market rent. These tenancies are now rare; almost none have been created since the Housing Act 1988 took effect in January 1989.

The modern meaning: a tenant in situ on an AST

Today, when a London landlord says they want to "sell with the sitting tenant", they almost always mean a tenant on an assured shorthold tenancy — the standard private tenancy since 1989. The discount is far smaller, because the tenancy can be ended on the correct legal grounds and the rent is (or can be brought to) market level. Throughout this guide, "sitting tenant" means this modern, AST sense unless we say otherwise.

Is it legal to sell with a sitting tenant?

Yes. Selling a property with a tenant in situ is entirely lawful and is the everyday route for landlords exiting buy-to-let, executors handling probate property, and owners who simply do not want the cost and delay of a void period. There is nothing to "get around": you are selling the property together with the contractual relationship attached to it.

The tenant keeps their right to quiet enjoyment of the home throughout. You cannot force viewings, change the locks, or pressure them to leave to make the sale easier. What you can do is market the property as an investment, arrange pre-vetted viewings where the AST allows, and complete the sale with the tenant remaining in place.

How the AST and deposit transfer to the new owner

This is the part sellers most often misunderstand. Two things move to the buyer on completion: the tenancy itself, and the tenant's deposit.

The tenancy transfers automatically

An AST is binding on a new owner whether or not they want it. The buyer steps into the landlord's shoes by operation of law — there is no need for the tenant to sign a new agreement or for you to "novate" anything in most cases. The new landlord inherits the rent, the term, the repairing obligations and any arrears history.

The deposit must be reassigned and re-protected

If you took a deposit, it is almost certainly held in one of the three government-approved schemes — the DPS, MyDeposits, or the TDS. On a sale, the deposit must be transferred to the new landlord, re-protected, and fresh prescribed information served on the tenant. Conveyancers normally handle this as part of completion.

Get this wrong and the penalty falls on the new landlord: under the Housing Act 2004, a court can order them to pay the tenant one to three times the deposit and return it. A buyer's solicitor will therefore scrutinise the deposit paperwork closely — which is exactly why having it in order before you market protects your sale price and your timeline.

Notifying the tenant after completion

Under Section 3 of the Landlord and Tenant Act 1985, the new landlord must notify the tenant in writing of the change of landlord within two months of completion. Good practice is to tell the tenant earlier so they know who to pay and who to contact for repairs.

The paperwork a buyer's solicitor will want

A sitting-tenant sale lives or dies on its paperwork. Have these ready before you market — missing items are the single most common cause of a tenanted sale slowing down or collapsing:

• Signed and dated AST for the current tenant.
• Deposit protection certificate and prescribed information showing the deposit is correctly protected.
• Gas safety certificate (CP12), valid within the last 12 months.
• Electrical safety report (EICR), valid under the Electrical Safety Standards Regulations 2020.
• Energy Performance Certificate (EPC) — currently a minimum of E, with a proposed move to C for rented homes later this decade. Check yours at gov.uk/find-energy-certificate.
• How to Rent guide — evidence the current edition was served at the start of the tenancy.
• Rent statement and any arrears history — a clean record reassures the buyer; an honest one protects you from later claims.

The discount versus a vacant sale — and why it exists

A house sold with a tenant in situ usually fetches less than the same house sold empty. That is not a quirk; it reflects who can buy it.

• Smaller buyer pool. Owner-occupiers cannot move into a tenanted home, so the buyers are investors. Fewer competing buyers means less upward pressure on price.
• Less flexibility. The buyer inherits a tenancy they cannot end at will — under the Renters' Rights Act 2025 they need a valid ground for possession.
• Rent level. If the in-place rent is below market, the investment looks weaker and the discount widens.
• Paperwork risk. Gaps in deposit protection, safety certificates or the tenancy file make a cautious buyer price in risk.

For a modern AST, the gap is typically in the single-digit to low double-digit percentage range. For a genuine Rent Act protected tenant, it can be far larger because of the controlled rent and lifetime security. The trade-off is that you avoid a void period, lost rent and re-letting or relocation costs — and, increasingly, the difficulty and delay of obtaining vacant possession at all.

The Renters' Rights Act 2025 — what changed for sellers

The Renters' Rights Act 2025 is the most significant reform of the private rented sector in a generation, and it reshapes the maths of selling with tenants.

• Section 21 is abolished. The "no-fault" route to vacant possession is gone. A landlord can no longer simply serve notice and recover the property on demand.
• Fixed-term ASTs become periodic assured tenancies. Tenancies roll on a periodic basis, and possession requires a specific statutory ground.
• A dedicated ground for selling exists, but it comes with notice requirements and conditions, and it does not deliver the speed or certainty that Section 21 once did.

The practical consequence: promising an owner-occupier buyer a guaranteed vacant-possession date has become slower and riskier. That, in turn, makes selling with the tenant in situ to an investor a more attractive and more predictable route than it used to be — you are selling exactly what you have, rather than betting on getting the tenant out first. Because the detailed rules and transitional timings are still bedding in through 2026, take current legal advice before serving any notice or committing to a possession-based sale.

Your routes to sell with a sitting tenant

There is no single "right" route — it depends on your timeline, your price expectation, and the strength of your tenancy. In brief:

Where L&M fits

L&M Property Sourcing is a London-focused property sourcing firm. Our role is to help sellers understand their options and, when our seller service opens, to match suitable tenanted properties with investors looking for that kind of stock. We are building this service now and operating a waitlist.

To be clear about what that means: we do not buy your property ourselves, we do not make cash offers, we do not promise a completion date, and we do not quote a yield or a guaranteed price. When we value a property for an investor we use a discount to RICS Red Book valuation, supported by a methodical six-comparable analysis, rather than a vague "below market value" headline. Any sourcing fee is disclosed up front.

If you are weighing up a sitting-tenant sale, the most useful thing you can do today is join the seller waitlist. You will be among the first to hear when the service opens, and in the meantime you will receive plain-English guidance — not a sales pitch.

Frequently asked questions about selling with sitting tenants