Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.
Selling With Tenants Can Strengthen Landlords’ Position, Report Finds
A recent report from Property118 outlines the advantages for landlords who choose to sell their properties with tenants in place. The article notes that maintaining a tenanted property allows landlords to continue earning rental income while seeking the right buyer, rather than facing the financial pressures of an empty property.
Traditionally, many landlords have sought vacant possession before selling, aiming to achieve the highest possible price. However, the report highlights that obtaining vacant possession—particularly through Section 8—can result in properties sitting empty for 12 months or more, exposing landlords to ongoing costs and uncertainty. The article suggests that a growing number of landlords are now prioritising a faster, less risky sale over maximising the sale price.
The report references data from Hamptons, which found that investors accounted for over 14% of all property transactions in July. These buyers are often interested in turnkey opportunities, preferring properties with established tenancies that generate immediate rental income. The article cautions that evicting tenants may make properties less attractive to such buyers.
The report also notes that in a buyers’ market, selling with tenants in situ can allow landlords to negotiate from a stronger position. With ongoing rental income, landlords are not under the same pressure to accept lower offers simply to avoid the costs of an empty property. The article points out that sellers should remain realistic about pricing, referencing Hamptons data indicating that 56% of investor offers were at least 10% below asking price, compared to an average discount of 3.5% across all sales reported by Zoopla.
The article concludes that, despite potentially accepting a lower sale price, landlords can benefit from reduced costs related to redecorating, replacing fixtures, and covering council tax, insurance, utilities, security, and mortgage payments on an empty property. The report states that properties are typically sold for 85–90% of their open market value, often without disturbing tenants, and that this approach can attract chain-free investors able to complete sales within 56 days.
Source: Property118