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.

I would not sell to them. They have only been in your property for 18 months, it is not as if it has been years.
Yes, more hassle, but think of the extra money for your children.
We have a house in the UK and currently live abroad. Unless the tenants give us an offer that is reasonable with the estimates online we will sell ours to someone else.

I would get a couple more EA valuations and say you want a realistic price for a quick sale. If they still value between £500K and £550K I would offer to the tenant at £490k.

if the valuations are different adjust accordingly.

Not necessarily. We had three quotes, all within 10k..put it on for the mid point and sold within the first week.

You only need to look on rightmove to see what they offer out for

Don’t forget the estate agents both have a vested interest in you putting the house up for sale with them. They could easily be putting forward an inflated valuation for that purpose. It’s the difference between a fee and no fee for them.

Housing market is pretty soft in the UK at the moment, you could wait a long time for a buyer.

I'm a LL, would sell to my tenants in heartbeat - even if the offer was slightly lower than what I might achieve on the open market.

Good reasons are:

No estate agent fees, no chain, no waiting.

No need to evict before sale, which can be costly and drawn out.

Look at what other houses are selling for locally. How recent are the sales? You said your house is different to others. Is that a point in your favour? If the tenants have children they might want to drag it out till the school year ends after next November.

This is not a Sellers' market. I would accept the offer.

Yes. I agree with this.

Nothing here is selling for asking price. I would guess 550 is unlikely. Maybe you could pay for a valuation and see what that says, rather than take a risk with an estate agent who has a vested interest in telling you it’s worth more than it is.

Actually another thing to consider - what the rental market like in your area? Could you easily get new tenants in if they leave? Many landlords near me are selling up or have given notice to tenants planning to sell up to get out before the new rules come in. This has had the knock on effect that rental properties- particularly the ones near good schools or easy access to the train station etc are in high demand.

If you want to sell at some point but not yet, and could easily get new tenants at a level that would easily cover your mortgage on the property, you can go back with £500k (or even £525k) and if they turn you down, re-rent it at the end of their lease to someone else for another year.

But if there’s a lot of property similar size and location to yours for rent and they are sitting empty for a long time, then you might want to think if it’s going to be a good idea to get your money out of this house and invest elsewhere.

I would see if the tenants could pay £500k, but even if you went on the open market, I doubt you would get £550k. Estate Agents ALWAYS give a generous range and sellers ALWAYS hear the higher number. In reality (especially in this market) you will either have to take a lower offer/be on the market for very long time.

Check but if you sell a house at under value you still have to pay cgt as if it sold at full value. I sold a house to my youngest ds at £65k under value but had to pay cgt on its true value.

But that might have specifically been BC it was a family member who benefitted.

Ask them to push their offer up to 500k.

Get 2 more valuations, minimum. Bear in mind that the tenants are well within their rights to refuse viewings until they (if they) vacate on the end date. Make sure you give notice in good time. Hopefully they won’t be awkward like my aggressive alcoholic tenant who refused to pay rent once he’d been given notice and left about a skip’s worth of shite (literally and figuratively).

I know there is little sympathy on here for landlords sometimes, but the stress can be horrible. I think, in your position, I’d be tempted to say I’m marketing, I’m expecting x amount, then see what they say. Don’t let them go past the November deadline, tho. You need to know their mortgage is in place.

Bear in mind you may have a void period/sitting tenants are extremely off putting to buyers.

Op don't forget from May 1st the fixed term tenancy will come to an end and after that you need to give 4 months notice.

It took me 1 year to sell my house and in the end I reduced it by £20k so I'd sell to the tenants. It's a dead market atm, lots of financial uncertainties are making people unsure of committing to large expenditures.

Get a few more quick sale quotes and then contact a property solicitor to arrange the sale privately. Skip the estate agent entirely and save yourself a few grand. Tell the EA you've decided not to sell if they pester you for your business.

The potential extra money is naturally very tempting but bear in mind you’ll need to evict your current tenants first. See if you can get an extra 10k from them and , even if not, sell to them.

We’ve bought our house from our landlord. About 10% under market value, but no estate agent involved. Quick sale for our landlord with no complications (not easy to sell with a tenant, and an empty house costs money as it needs maintenance), cheaper and a house we knew well for us. Win-win

The stamp duty is 5% from 250k up to £925k , no change at 500k

I'd sell, maybe try to negotiate £500 out them.

But putting it on the open market means estate agent fees. Hassle of viewings with a tenant who doesn't want to move.
If stamp duty jumps at £500k your unlikely to get much more than £500k anyway.

The renters reform act coming into force in April will change things significantly. If you are going to give notice, do it now whilst it is easier.

I’d initially say no, but you’ll accept 500k but then if they can’t/won’t do that, I’d accept the 485.
A bird in the hand is worth two in the bush.

take the offer, you get rent right up until they buy it. Sell to someone else, you have empty property, you paying the bills, risk of it falling through and the costs going on and on.

also the risk of empty property, no one noticing damage, high insurance

a tenant insitu sale is valuable

it doesn’t, stamp duty doesn’t change till 925k for main residence

I would sell it to tenants but ask them to revise their offer again. Tell them the estate agent valuations and say you’re happy to give a little discount but needs to be close / in line with the market.
then see what they come back with, don’t give them a price. I’d be bc expecting an offer starting with a 5 but not necessarily above £510-515k.

there are benefits to selling to them but it’s still a business transaction at the end of the day.