How Much Does A Sitting Tenant Devalue A Property?

Selling a house with tenants can present both opportunities and challenges, particularly if the tenant has the legal right to remain in the property during and after the sale. If you’re wondering, how much does a sitting tenant devalue a property? Or more specifically, what impact they have when you’re preparing to sell; this guide will walk you through everything you need to know.

What is a sitting tenant?

A sitting tenant is someone who continues to live in a rental property during the process of it being sold. These sitting tenants usually have legal rights to remain under the terms of their existing tenancy agreement, which can be either an assured tenancy, regulated tenancy, or assured shorthold tenancy.

The presence of a sitting tenant often means that the new owner must honour the existing lease agreement. This situation is common when properties are sold to landlords or investors, but can deter buyers looking for vacant possession.

How much does a sitting tenant devalue a property?

In general, a property with a sitting tenant can sell for 15% to 40% less than its vacant market value. The precise devaluation depends on several key factors:

• The type and length of the tenancy
• The tenant’s legal rights and protections
• The property’s current condition
• Rental yield potential
• The buyer demographic (investor vs. residential buyer)

Because many buyers prefer to purchase homes they can move into immediately, the presence of sitting tenants can limit your market (usually to landlords and property investors). This reduced demand often results in a lower sale price.

Disadvantages of selling a property with a sitting tenant

There are several drawbacks to listing a tenanted property:

1. Smaller buyer pool

Owner-occupiers are often unwilling to buy homes they can’t move into straight away. That means fewer potential buyers and less competition.

2. Reduced market value

Buyers may offer less due to complications surrounding sitting tenant rights, access for viewings, and limitations on vacant possession.

3. Legal complexity

If the sitting tenant is protected under regulated or assured tenancy laws, removing them could be extremely difficult and time-consuming.

4. Property condition

Long-term sitting tenants may not maintain the property to a high standard, making it less appealing to prospective buyers.

Advantages of selling a property with a sitting tenant

There are upsides too, particularly if your target buyer is a landlord or investor:

1. Ongoing rental income

You will continue to receive rent until completion, which will help to maintain cash flow.

2. No void periods

If sold to another landlord, there’s no need to evict the sitting tenant or suffer from an empty property.

3. Lower running costs

With a sitting tenant, they typically cover council tax and utilities during the sale process.

4. Attractive to investors

Many landlords view sitting tenants as a ready-made income stream, saving them from having to find new tenants post-sale.

Can you remove a sitting tenant before selling?

Yes, it’s possible to remove a sitting tenant, but it depends heavily on the type of tenancy and their legal protections. Here are five possible strategies:

1. Mutual agreement

You can negotiate with the sitting tenant to leave voluntarily, perhaps by offering compensation or relocation help.

2. Serve legal notice

For periodic tenancies, landlords can serve notice under Section 21 or Section 8, though recent reforms are changing this landscape.

3. Break clauses

If your tenancy has a break clause, you may be able to end the tenancy early by giving proper notice.

4. Vacant possession clause

You can agree to sell only with vacant possession, which means ensuring the sitting tenant leaves before completion.

5. Legal proceedings

In rare cases, you may have to take legal action if the sitting tenant refuses to leave and all other routes fail.

Always check the upcoming Renters Reform Bill for changes in legislation, and seek legal advice when dealing with sitting tenants.

What rights does a sitting tenant have in the UK?

Understanding what rights a sitting tenant has is vital when selling. These rights often limit a landlord’s ability to remove a tenant or sell with vacant possession:

1. Security of Tenure
   Most sitting tenants, especially under regulated tenancies, cannot be removed without legal justification.
2. Rent Controls
   Some sitting tenants have rent levels set by a Rent Officer, which cannot be arbitrarily increased.
3. Succession Rights
   A family member can sometimes inherit the tenancy rights of a sitting tenant.
4. Notice Periods
   Landlords must provide correct notice before increasing rent or ending the tenancy.
5. Eviction Protection
   All sitting tenants are protected by strict eviction laws. Court orders are often required to regain possession.

These rights provide tenants with security but may deter buyers, particularly those looking for a home to live in themselves.

Selling a property with sitting tenants for cash

If you’re ready to sell and don’t want to deal with the legal and logistical complexities of sitting tenants, consider a cash sale.

Why sell to Sell House Fast?

• Speed – Complete your sale in as little as 7 days.
• Simplicity – Avoid the hassle of evicting sitting tenants or negotiating with multiple buyers.
• Certainty – No chains, no delays, no surprises.
• Experience – We specialise in buying homes with sitting tenants and can offer a fair cash price.

Whether you’re relocating, downsizing, or offloading a rental portfolio, we make selling your sitting tenant property straightforward and stress-free.

FAQs About Selling with a Sitting Tenant

Sell your House with sitting tenants – the fast way

If you’re considering selling a property with a sitting tenant, Sell House Fast 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 Sell House Fast today to learn how we can help you sell your house fast, regardless of its tenancy status. We buy your house or flat across the UK.