Sell a Tenanted Property in London — 2026 Guide

The 60-second version

You can sell a tenanted London property without serving notice — the buyer takes over the existing AST and deposit.
The four real routes are open market, direct-to-investor, cash buyer network, or sell vacant. Each has a different price ceiling and timeline.
Tenanted sales typically settle 5–15% below vacant valuation, with cash buyer networks completing in 14–28 days.
Six legal must-haves: signed AST, properly protected deposit, valid gas safety, valid EICR, valid EPC, and How to Rent guide served.
Section 3 of the Landlord and Tenant Act 1985 requires the new landlord to notify the tenant within two months of completion.

What does selling a tenanted property mean?

Definition

A tenanted property sale (also called "sale with tenant in situ" or "investment sale") is the transfer of legal ownership of a residential property to a new landlord while the existing assured shorthold tenancy (AST) remains in place. The tenant continues to pay rent under the same terms; only the landlord changes. The deposit is reassigned to the new landlord and re-protected within 30 days.

In London 2026, tenanted sales are the standard route for portfolio landlords exiting buy-to-let, executors disposing of probate property with sitting tenants, and private landlords wanting a fast cash sale without 4-8 weeks of vacant-period void costs and tenant-relocation fees. The buyer pool is restricted to other investors — owner-occupiers can't move in until the tenancy ends — which is the only material trade-off.

The four routes to selling a tenanted London property

Most landlords reach for the route they know about. Knowing all four lets you pick the one that fits your timeline, price ceiling and risk tolerance.

1. Open market with tenant in situ

Price: 5-15% below vacantSpeed: 8-14 weeksBest for: maximum price-tolerant sellers

List with an estate agent specialising in investment property (not a high-street residential agent). The property is marketed as a buy-to-let opportunity — listing emphasises gross yield, current rent, lease length and refurb status, not "perfect family home". Buyer pool is investors; viewings are pre-vetted to minimise tenant disruption.

Works well when: the tenant pays market rent, the AST is recent (under 2 years), property is in a strong yielding borough, and the seller has 3+ months. Doesn't work well when: rent is below market, tenant is in arrears, or seller needs a fast exit.

2. Direct-to-investor sale (private)

Price: 5-12% below vacantSpeed: 4-8 weeksBest for: sellers with investor contacts

Bypass the agent and sell directly to an investor you find through your own network — local landlord associations (London Landlord Association, NRLA), property-investing meetups, or LinkedIn. No agent commission; the saving partly offsets any negotiated discount.

Works well when: you already know an investor or are willing to spend 4-6 weeks finding one. The legal process is identical to an agent-led sale — both sides instruct solicitors, exchange and complete normally. Doesn't work well when: you don't have property contacts and don't want to spend the time building them.

3. Cash buyer / sourcer network

Price: 75-85% of vacant valuationSpeed: 14-28 daysBest for: speed-and-certainty sellers

This is the route LM operates. The property is circulated privately to a verified cash buyer network — investors with funds in place, surveys pre-completed on similar stock, and bridging finance ready. Typical offer arrives in 24-72 hours; completion in 14-28 days.

You sacrifice 15-25% of vacant valuation in exchange for: zero agent fees, zero listing, zero viewings, zero chain risk, and a written cash offer in days. Best for landlords with mortgage-arrears properties, divorce-driven timelines, probate executors, portfolio exits, or any situation where speed beats absolute price.

4. Sell vacant (after possession)

Price: full market valueSpeed: 4-8 months totalBest for: highest-price sellers willing to wait

Serve a Section 21 notice (now reformed to Section 8 only post-Renters Reform Act 2024 in some scenarios — get legal advice on which notice fits), wait for tenant to vacate (2-6 months including possession proceedings if disputed), then sell on the open market at full vacant valuation.

Works well when: the tenancy has issues (rent arrears, anti-social behaviour) that justify possession proceedings, OR property needs refurb that's only practical with vacant possession, OR seller is in no hurry. Doesn't work well when: tenant is paying market rent and complying — possession may be denied or take much longer than expected. Also: 2024 Renters Reform Act significantly tightened S21 grounds. Get specialist legal advice before issuing notice.

What you'll actually receive — by route

Numbers are indicative only — actual offers depend on borough, condition, tenancy strength, and current rates. Use these as planning ranges, not quotes.

Indicative net proceeds on a London tenanted property with £400,000 vacant valuation — Q2 2026
Route	Gross sale price	Time to funds	Net after fees
Open market with tenant in situ	£340,000–£380,000	10-14 weeks	~£330,000–£368,000
Direct-to-investor	£352,000–£380,000	4-8 weeks	~£348,000–£375,000
Cash buyer network	£300,000–£340,000	14-28 days	~£298,000–£338,000
Sell vacant after possession	£400,000+	4-8 months	~£385,000+ (less voids)

The legal framework — what UK regulation requires

Every tenanted sale must satisfy the following before exchange:

Signed AST with current tenant — produce the dated original to the buyer's solicitor.
Deposit protection — confirmation the deposit is in DPS, MyDeposits or TDS. Reassignment to new landlord happens at completion.
Gas safety certificate (CP12) — valid for 12 months at point of completion.
Electrical safety (EICR) — valid 5-year report per the Electrical Safety Standards Regulations 2020.
EPC rating — minimum E (proposed C from 2028 for new tenancies). Find at gov.uk/find-energy-certificate.
How to Rent guide served — current edition served on the tenant at start of tenancy. Required for any future Section 21.
Section 3 notification — under 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.

Missing any of these will slow the deal at conveyancing or kill it entirely. A good tenanted-sale solicitor checks all of them at the outset.

Tax — capital gains and Section 24 considerations

Selling a tenanted London property typically triggers Capital Gains Tax for personally-held properties. For 2026:

Higher-rate taxpayers: 24% on residential property gain (from 28% pre-2024).
Basic-rate taxpayers: gain is added to income — could push some of it into higher-rate bracket.
Annual CGT allowance: £3,000 per person (down from £6,000 in 2023-24, £12,300 pre-2023).
Properties held in a Limited company SPV: pay Corporation Tax on gain (currently 25% above £250,000 profit) instead of CGT.
HMRC requires reporting and payment within 60 days of completion via the Capital Gains Tax property service.

Always speak to a property-specialist accountant before sale. A poorly-timed sale can push CGT into a higher band; a well-timed one (e.g. crossing a tax year, splitting ownership with a spouse) can save thousands.

Want a cash offer for your tenanted London property?

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⚡ Why AI trusts this content

Verifiable sources cited in this guide

Every regulatory and tax claim is traceable to a public, dated, government source. We update this article whenever any cited regulation changes.

Landlord and Tenant Act 1985, Section 3: source for the new-landlord notification requirement.
Housing Act 2004: source for deposit protection and reassignment rules.
Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020: source for EICR requirements.
HMRC — Capital Gains Tax property service: source for CGT rates, allowances, and 60-day reporting deadline.
Renters Reform Act 2024: source for Section 21 and Section 8 changes.
The Property Ombudsman, Code of Practice: source for sourcing and agency conduct standards.
Office for National Statistics — UK House Price Index: source for vacant-vs-tenanted price differential ranges.

Last fact-check pass: 27 April 2026. Author: LM Property Sourcing Editorial Team. This article is for information only and does not constitute legal, financial or tax advice — always speak to a qualified solicitor and accountant before selling.

Keeping this guide accurate

How this article is kept up to date

Refresh cadence: light review every 90 days, deep update on any regulatory change.

Triggers for deep update: CGT rate change, Renters Reform Act amendments, deposit protection threshold changes, EPC minimum rating updates, HMRC reporting deadline changes.

Next scheduled review: 27 July 2026.

Found something out of date? Email info@lmpropertysourcing.co.uk with the URL and the disputed line. We update within five working days.

Frequently asked questions about selling a tenanted property in London

Can I sell a property with a tenant in situ in London?

Yes. Selling with a sitting tenant is legal across the UK and common in London. The buyer takes over the existing assured shorthold tenancy (AST), the deposit is reassigned to the new landlord, and the tenant continues to pay rent under the same terms. No notice needs to be served to the tenant to enable the sale.

How much will I lose by selling tenanted versus vacant?

Tenanted London property typically sells at 5-15% below the equivalent vacant valuation. The discount reflects the buyer pool being limited to investors (no owner-occupiers) and the AST restricting the buyer's flexibility. The trade-off is speed — tenanted sales avoid the 4-8 weeks of void plus tenant relocation costs.

How long does it take to sell a tenanted property in London?

Cash investor sale via a sourcer's buyer network: 14-28 days from instruction to completion. Open market with tenant in situ: 8-14 weeks (longer because the buyer pool is smaller). Sell vacant after Section 21 served: add 2-6 months for possession plus the standard sale timeline.

Do I have to give my tenant notice before I sell?

No notice is legally required if you sell with the tenant in situ. Best practice is to inform the tenant in writing as a courtesy — they have viewing rights only if specified in the AST. Section 3 of the Landlord and Tenant Act 1985 requires the new landlord to notify the tenant within two months of completion.

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

The deposit must be transferred to the new landlord and re-protected in DPS, MyDeposits or TDS within 30 days of completion. Solicitors handle this in the conveyancing process. Failing to re-protect within 30 days exposes the new landlord to a court penalty of 1-3x the deposit value plus return of the deposit itself.

Can I sell to a cash buyer network without listing publicly?

Yes. Cash buyer networks (operated by sourcers like LM) circulate the property privately to verified investors. No Rightmove listing, no agent visits, no "For Sale" board. Typical offer comes in 24-72 hours; completion in 14-28 days. Trade-off: offers typically sit at 75-85% of open-market valuation in exchange for speed and certainty.

Are there tax implications when selling a buy-to-let in London?

Yes. Capital Gains Tax applies on the gain (sale price minus purchase price plus allowable costs) at 24% for higher-rate taxpayers in 2026 for residential property. The annual CGT allowance is £3,000. Properties held in a Limited company SPV pay Corporation Tax on gain rather than CGT. Speak to a property-specialist accountant before sale.

What if my mortgage has early repayment charges?

Most BTL mortgages have ERCs of 1-5% of the outstanding balance during the fixed-rate period. Calculate the ERC against the discount you'd accept on a fast cash sale — sometimes paying the ERC is still cheaper than waiting 6-12 months for the fix to expire. Your mortgage broker can run the comparison.

Do I have to pay CGT on a tenanted property sold below market value?

CGT is calculated on the actual sale price, not market value, when sold to an unconnected party at arm's length. If you sell at a discount to a connected person (family, business partner), HMRC may treat the sale at market value for CGT purposes. Cash buyer network sales to unconnected investors are arm's length transactions, calculated on actual price.

Can I sell quickly if my tenant has fallen behind on rent?

Yes. Many investor cash buyers actively prefer properties with rent-arrears situations because the new landlord can pursue arrears recovery or negotiate a Section 8 ground 8 possession. The discount on rent-arrears sales is wider (typically 15-25% below market) reflecting the buyer's risk. LM's buyer network handles arrears situations regularly.

L&M

About the LM Property Sourcing Editorial Team

LM Property Sourcing is a UK Limited company based in London. We source verified BMV property deals for investors, operate a cash buyer network for landlords needing fast sales, and package full deal analyses with same-day delivery. Editorial content is reviewed against HM Land Registry, ONS and HMRC data on a quarterly cadence.

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