Do I sell house to tenants

[Movingon2024]

Asking here as no-one else to ask for advice really.

moved abroad 2024. Uk house rented to some lovely tenants. Is in a v desirable area and a v nice property.

trnants approached after Xmas and asked to buy the house. Tenancy ends November.
they made an offer of 420, I am out of touch w uk housing market so asked for EA valuations. Came back at 500-550.

called both EAs and asked for reasons for valuations. They both said local market has increased significantly in last year linked to changed schools admission criteria (local schools are outstanding). Both said 500 would be low offer for the property.

informed tenants who then increased offer to 485. Estate agent fees (I asked) are around 1 per cent.

am very torn. Have accepted that the house needs to be sold, it’s too big for me now that kids have moved on. The tenants are a lovely family and would be great owners of it.

But the price difference if it sold at 550 would make a massive difference to our lives - I could give the kids some cash to help them with a house deposit of their own for example.

Any advice? Said I would get back to them by end weekend. thankyou so much.

Majority of properties in my area are going for significantly more than asking price.

would you be annoyed if they then sell the house for £550k within 6 months?

personally I’d go back to them and say you are happy to keep renting to them. If they move out you’ll sell and put it on the market for £550k. You would accept £500k from them to avoid any hassle of selling on the open market.

Please take this kindly OP, but all your lovely work is irrelevant if your tenants aren’t happy to have viewers around, they have no motivation to show off all the lovely improvements and having sitting tenants actually puts buyers off.

I understand that the estate agents are tempting. They of course want you as a customer and so will tempt you but they are interested in their commission not what is best for you. For a different perspective read the sales threads here. I don’t know where you are, but in most areas the market is very slow, with properties having to drop asking price to sell.

When the agents say £500-550k - they mean £500k. The £550k is there to tempt you but is fictional. They mean that £500k is the ballpark and £485k is a fantastic offer. You save the agents fees and have a guaranteed sale.

If you go on the market, it’s very likely we will see you here in a years time talking about why is it not selling, collapsed chains and dropped prices.

The economics are no longer there for high prices. Interest rates are much higher than 5 years ago so repayments are high. Salaries are flat and taxes on young families are insane due to frozen thresholds and student loan repayments. Immigration is also now expected to turn negative so there is little to sustain such high prices.

You say the tenants have a tenancy until November so you cant even start to get them out until then. Then its christmas and very slow for sales. You would be looking at a years time until you could actually get it on the market.

I personally would say to them 485k and its theirs. Gets you out of this quickly, you dont have to worry about all the new renters rights coming up.

I'd second this. You have to factor in the void period (insurance and other costs may increase) and also it's harder to sell an empty house. You may need to paint it etc ebfore selling. Then unless you are absolutely 100pc sure there's no issues with the house someone may offer you 500k and then say " wiring isn't up to date, want 10k off" or windows dont have fensa certs or whatnot.
This way you are being paid rent until the day you complete and they already know everything there is to know about the house.

Say to your children, Sorry guys. I was going to give you both £25 but decided to give it to the tenants that I've known for 18 months as they need it more

I’d seriously consider selling it to the tenants, and charging them rent right up to completion day.

It’s pretty much impossible to sell with sitting tenants, so to sell you’ll have at least 6 months with no rental income (for a very fast sale) and realistically easily a year.

If you can’t afford to take that income hit while you sell it, then you can’t afford to sell it on the open market.

Its totally not that simple though is it. Up thread are some very good reasons why the £50,000 may erode a fair bit if going to open market, and the potential of a long void period (after managing to get the tenants out; as others have highlighted, selling with sitting tenants is not easy)

Prices where we are SE are going down, houses what would have gone for £575,000 last year are now on sale for £500,000. Estate Agents tend to price for 10% negotiable, so your tenants aren’t far off. House selling is so stressful, you have a buyer ready made. It took my neighbour over 2 years to sell her property in a chain, you won’t have one.

I’d say ‘525k’ and you have a deal’

They might push back to 500 but it’s all part of the negotiation.

How much will the fee be to pay off mortgage early too?
I would sell to them at that price.
Cost of getting them out. Cleaning it up if needed. Loss of rental income. Fees and more fees. Even if you got 550 alot of that would be wiped out by these kinds of things. If you only got 500 you'd be less than what they are offering

An EA quoting £500-£550k means you’re talking about £500 really. How much evidence can the EA provide that the market really is buoyant? Are local salaries near you such that families with school age children will be competing for £500k houses? In some markets that’s still a very affordable range with lots of demand, less so in others.

You could try and push them further to £495k but I don’t think they’re taking the piss at £485k.

You need to assign a proper value to the hassle factor of first getting them out, inevitable repairs and touch ups and maintaining an empty home (potentially for a significant period given chains etc).

The agent is upping the price so you choose to market through them and you don’t sell to the tenants so they get their cut. You have no idea how much the property will sell for on open market if at all.
You aren’t walking away from £60k you are making wherever you bought it for and the selling price. The tenants have also given you many thousands of pounds while they’ve rented from you.
Tell them you will sell it to them for £495k. No agents fees means that’s the equivalent of £515 ish open market. Add into that the cot of tarting it up to market, the hassle and how long you would need to be without rent while you tried to sell (as if the tenants have any sense they will refuse viewings if you sell open market) and you are in pretty good position.

A bird in the hand and all that.

If stamp duty doubles at £499, tell tenants you'd go for just below.
Estate agents want you to sell the house through them to get the commission.
You would struggle without a tenant in the property even for a few months.
Bird in hand and all that.

You need first to do some research about what similar properties are selling for in your area. In order for the difference to actually be 50k, it'll probably need to go for more than 550k when factoring in voids, estate agent expenses and the other stuff people have outlined. And this is assuming the tenants behave.

Assuming the estate agents are being a bit on the optimistic side, as they so often are, I lean towards offering to the tenants. It's the lower risk option.

A friend had a similar thing and sold at a lower price. Same thing she said the larger number would be life changing but then decided they’d loved the house and she didn’t want to mess them over, she basically said the housing problem is fully because of people wanting more which I know is idealistic but it’s true! What happens if it doesn’t sell at the higher price? You’ll have lost the sale anyway!

Please check whether you’ll get stung for capital gains tax in your new country. I’m moving to Spain and am selling my UK property before I go or I’ll get hit for 25% tax on the profit and given we bought this house 30 years ago that’s a lot of money.

I’d sell to them . No EA fees. No eviction costs and complications which could cost you buyers and a lengthy void period. (I would never offer on a tenanted property unless there was proof that the tenants had a new place to move to). No last minute pulling out by buyers etc

They won't though!
If OP needs to sell now then what it might sell for in 2 years is completely irrelevant.
And the £50k is a) entirely hypothetical and probably not real and b) will be half of that if the costs associated with removing tenants plus void period plus estate agent fees in ani case
as things are in reality OP may end up
pocketing a lot less than £500k if she chooses to sell on open market. Anyone who believes that's estate agent asking prices are actually achievable in 2026 is delusional.

A lot of us feel the same way about offering on tenanted properties, so you really need to take that into consideration OP. If they're in a position to make a 485k offer on a property, they probably have other options.

Sell to them. It’s immoral to make money off people’s need for housing. puts on flak jacket

Get proper advice. There will be capital gains tax perhaps.

A below market sale can have repercussions.

I agree!

And as said above I’d never buy a house with tenants in. You’re lucky they want to buy it tbh it will save you so much hassle

@Lennonjingles Exactly. I’d love to know where prices are going up a lot! Snd from what starting point.

The op might not turn a profit - but expects to. She’s had rental money though so it’s not totally without a profit. These days it can take a hell of a long time to get back what you spend on a house - hence the term “forever home”. It’s a case of improving a house for you, not profit.