How Much Does A Sitting Tenant Devalue A Property?

What impact does a sitting tenant have on a property value when you want to sell? 

Selling a property with tenants can significantly influence the market value of your house or flat. This post explores the complex relationship between sitting tenants and property valuation, offering insights for sellers looking to navigate this scenario. Whether you’re considering selling a house with a sitting tenant or just curious about the implications, read on for a comprehensive guide.

What is a sitting tenant?

A sitting tenant is someone who occupies a rental property during the sale process. These tenants often have legal rights to remain in the property under existing lease terms, which can extend beyond the sale. The security of tenure they enjoy, especially under regulated or assured tenancies, can present unique challenges and opportunities for sellers.

Disadvantages of selling a tenanted property

• Market appeal. Properties with sitting tenants may appeal to a narrower market, primarily investors or landlords, rather than owner-occupiers. This reduced buyer pool can impact the property’s market value.  
• Rental income vs. vacant possession. While a sitting tenant provides immediate rental income, properties offered with vacant possession generally command higher prices. The guarantee of immediate occupancy is often more appealing to buyers.
• Legal restrictions. Selling a property with a sitting tenant can be legally complex, especially if the tenant has security of tenure. This can deter some buyers.
• Property condition. Properties with long-term tenants may require more maintenance or updates, potentially reducing their market value.

Advantages of selling your property with a sitting tenant

No vacancy periods. Selling to an investor means there’s no need to worry about vacancy periods or lost income between tenants.

Maintain your rental income. You’ll continue to receive rent, right up until the point of completion.
Avoid unnecessary costs. No utility bills or council tax to pay while you maintain the property after evicting your tenants — they continue to cover those costs. 

The buyer receives an immediate income. Sitting tenants are an attractive prospect for a buyer, as they can start earning money from the property straight away. 

Can you get rid of a sitting tenant when selling your property?

Yes, it is possible to get rid of a sitting tenant when selling a property, but the process and ease with which this can be done depend on the type of tenancy agreement in place and the laws applicable in your jurisdiction. If the tenancy agreement comes to an end before sale there are no problems. However, here’s five strategies for an alternative scenario. 

Mutual agreement. The simplest way is through mutual agreement. You can negotiate with the tenant to leave voluntarily, possibly by offering a financial incentive or assistance in finding a new place to live.

Serving notice. For periodic tenancies, you can serve the tenant with a notice to quit, according to the legal requirements. The notice period will depend on the terms of the tenancy and local laws. The UK’s Labour Government is intent on abolishing Section 21 so do check with professional organisations such as the National Landlord’s Association for the most up-to-date legal position for landlords. 

Using break clauses. If the tenancy agreement includes a break clause, you can use this provision to end the tenancy early, as long as you comply with the notice requirements and any other conditions specified in the contract.

Sale with vacant possession. If selling the property is contingent on it being vacant, this should be negotiated as part of the sale terms. The buyer may require the property to be empty by completion, which means you’ll need to ensure the tenant has vacated by then.

Legal action. If a tenant refuses to leave voluntarily and no other options are viable, it may be necessary to pursue (an expensive) eviction through the courts. 

It’s important to approach the situation with sensitivity and awareness of the tenant’s rights. Consulting with a legal professional who specialises in property law can provide guidance tailored to your specific situation and help ensure that any actions you take are lawful and appropriate. And check the small print in the upcoming Renter’s Reform Bill. 

For those looking to sell a property with a sitting tenant, SellHouseFast.co.uk offers a straightforward solution. Selling your property to cash house buyers SellHouseFast.co.uk can simplify the process, allowing you to bypass the complexities of dealing with sitting tenants. This approach can be particularly advantageous if you’re looking to sell your house fast. 

What rights does a sitting tenant have in the UK?

In the UK, sitting tenants have specific legal rights that protect their tenancy and occupation of the property. These rights vary depending on the type of tenancy agreement in place but generally include the following five points:

1. Security of tenure. Many sitting tenants, especially those under regulated or assured tenancies, have the right to remain in the property even after ownership changes hands. This means they cannot be easily evicted without just cause.

2. Fair rent. Sitting tenants, particularly in regulated tenancies, may have their rent determined by a Rent Officer, ensuring it remains fair and cannot be arbitrarily increased.

3. Succession rights. In certain cases, when a sitting tenant passes away, the right to the tenancy can be passed on or ‘succeeded’ to a spouse or family member, allowing them to continue living in the property under similar terms.

4. Notice periods. Landlords must provide sitting tenants with adequate notice if they wish to end the tenancy or increase the rent, according to the terms of the tenancy agreement and relevant legislation.

5. Protection from unfair eviction. Sitting tenants are protected from eviction without a legally valid reason. Landlords must follow a specific legal process and obtain a court order to evict a sitting tenant.

These rights are designed to offer stability and protection to tenants, ensuring they are not unjustly removed from their homes. However, these protections can also impact the landlord’s ability to sell the property with vacant possession, potentially affecting its market value. 

Selling your sitting tenant property for cash

For sellers looking to bypass the complexities of the open market, SellHouseFast.co.uk offers a compelling solution. Selling your property with a sitting tenant for cash has several advantages:

1. Speed. Cash sales can be completed much faster than traditional sales, ideal for sellers looking for a quick transaction.

2. Simplicity. A cash house sale to SellHouseFast.co.uk simplifies the process, avoiding the pitfalls of buyer mortgages and lengthy chains.

3. Certainty. With a cash buyer, the sale is less likely to fall through, providing sellers with peace of mind.

If you’re considering selling a property with a sitting tenant, SellHouseFast.co.uk offers a straightforward, hassle-free solution. Our team of experts understands the unique challenges of selling tenanted properties and is ready to make you a fair cash offer. Don’t let the presence of a sitting tenant devalue your property or complicate your sale. Contact SellHouseFast.co.uk today to learn how we can help you sell your house fast, regardless of its tenancy status. We buy any house or flat – across the UK.