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.

Depending on your tax threshold, you could be paying 24% capital gains on whatever you make on the property. That’s a lot of money and you need to factor that in with your calculations.

Thanks all.
massive help.
i think I need to actually cost things out as per pp suggestions.
very true about bird in the hand and useful reminder that it’s a business transaction at end of day

So sorry to hear that.

I am nut a landlord but there really are some atrocious tenants out there ruining it for the decent ones.

These bad tenants deserve not to be housed again. No excuse for their appalling behaviour.

I'm just glad social services know about them (because the woman kept calling the police) because the state the children were living in was awful, dog faeces on the bedroom floor, obviously peed all downstairs, they'd never trained the puppy they'd asked to get. The garden was appalling, there were fag ends all over, including in the loft! Half empty cans of beer everywhere. I took pics of the bathroom, bath panel smashed, loo had obviously never been cleaned. 😢 Poor kids.

If OP has made major changes to the property to the value of £100k, she can claim that in the CGT form, and that will bring the tax way down.

I've just done the online form myself, and it's very straightforward to claim that allowance.

This isn't main residence

Personally - I’d see if they’d go up to 500k and then sell to the tenants in a heartbeat.

Chances are your agents valuation is high, plus you need to get rid of tenants to get the best price, a likely minimum it’ll be empty for 6 months before sold (probably costing you close to 2k per month with all the bills as you says it’s 1.5k mortgage)

Tenants could turn nasty (could - they could be perfectly pleasant of course!) refusing viewings, refusing to leave, causing damage and costing you money and stress to get rid of them

Stuck in a chain, difficult buyers wanting money off last minute. Agent’s fees.

The 50k for your kids is potentially mythical and will be eroded by the time you get to it anyway.

Personally - I’d see if they’d go up to 500k and then sell to the tenants in a heartbeat

Me too. It was incredibly stressful trying to get my tenants out, and I was freakishly lucky that they did go, as I'd been warned that the vast majority of tenants are now waiting for the bailiffs, which would have cost me a fortune in legal fees and many months of waiting.

When they left, the property was a millstone round my neck, and I was having to travel long distances to get it ready for marketing. Again, I had a massive stroke of luck in that it sold very quickly in a dead market (I was very realistic about the price though) but it was still six months of admin, costs, lack of rental income and stress.

Have you factored in capital gains tax…

Have they confirmed they are in a position to buy it ? Mortgage in principle etc

I think that selling it to your tenants would be much more straightforward and less stressful. You won't have to evict anyone. You could get it wrapped up quite quickly and would be less disruptive to everyone.

It is obviously tempting to see if you can get maximum dosh out of it, but I also think that it's good thing to do to recognise that they have been good tenants and that they've made it a home and that even if it's not quite market rate, they've made you a good offer, and if they are able to proceed with that, i would absolutely do that.

Decide the figure that's the lowest you would accept to avoid going to market. Somewhere between 500-525 sounds about right to me. Don't be greedy, you likely won't get 550 and could get lots of hassle too.

Then simply be very clear, it's that or unfortunately you will be putting the house on the market at 550 on X date.

Estate agents are going to over value it I think too, because they know they'll get no commission if you sell to your tenants.

Sell to the tenants. Otherwise there is so much hassle selling on the open market.

Say I would genuinely love to sell it to you but I can’t at that price. I need to sell it for £550 K market value. I’m really sorry. If you had a much higher offer might consider it but we both know the house is desirable and has had a lot of repairs etc and is worth the top end of the market. If you have a more sensible offer I will hear it otherwise I’m sorry but I need access for photos etc to put it in on the market.

sit and hold out if they offer 500 K you can accept on the proviso they don’t mess you around and it’s a quick sell eg 6/8 weeks and maybe even put a date on it.

How do you know that ? It is for the tenants unless they own another property, sellers don’t pay stamp duty

I’d take it, estate agents often overcook the prices to get your business and people try to get a discount. £485 on those valuations is good

@Movingon2024
Put a thread on Property&DIY on Home&Garden lots of advice ( though they'll pester you for a link to the sale , say "No" it is your tenants home )

They will save themselves searching for another rental property and coming up with the deposit ( I'm guessing the LandLord doesn't return the deposit till they move out ?)
Add in moving costs for them.
And an End of Tenancy clean
It sounds like a very desirable property especially what you said about the schools . If they have DC /planning DC they'll be looking at this .

If you ask for a higher offer ( which you should do) then they need to consider the benefits to them to buy this house just as you need to consider the expense to you if you go on the open market .

And yes , EA always over estimate

It is for the tenants.

i would recommend you get the property correctly valued by an approved surveyor (not estate agent) as used by mortgage companies. Once you have this price you can discount it (reduce it by what you will save on estate agent fees, assume a saving of £2k as you will not need to get it market ready, assume a 3 - 6 month rent saving as you will have no void period) add all these savings together and then make a decision if how much you wish to discount from the surveyors price. If you do this properly, the tenants can take this discount from the surveyors price and apply it as a mortgage deposit. A surveyor will cost approx £200. This will give you and your tenants a win/win. You will not be out of pocket and you will have no hassle AND you can pass on some or all of your theoretical ‘savings’ as a mortgage deposit contribution. But it must be done properly to make it work.

I think if you sell to someone else you need to account for the property being empty for a while - during which time you have to pay the bills and forgo the rent. Try to put a num we on that (obviously guess work but you could make assumptions) and factor that in.

Super useful thanks all. A
lot of great points I hadn’t considered.
still pretty mixed opinions though.
It’s def the case that our area is a little bubble where prices have risen, i’ ve confirmed that. It’s linked to changed schools admissions criteria (catchment) for our local out at Sind schools.
for CGT I also checked and because I bought only 6 years ago and because I’m selling primary residence within 3 years CGT is n/a or negligible.
discussing it so helpful.

I've sold to tenants before and saved on EA fees by doing so. And its less complicated as you just hand over the transaction directly to a conveyancer/solicitor. Your solicitor then deals with theirs.
But do negotiate their fixed costs aswell and get everything in writing!
Historically I've found its much less complicated without the EA intermediary.

You need to check out your Lettings Agents contract because there may be a fee due to them for introducing the clients into your property.
Some Letting Agents will have that written into their contracts because more landlords are ditching properties due to excessive regulation.

I'd then tell the tenants £495-499k to keep it under the £500 stamp duty hike.

Did you tell the estate agents about the tenants' offer? Because if you did, they're going to give you a higher valuation as they'll get nothing if you sell to the tenants. I'd probably sell to them but I'd try to push them to 500k.

We sold our house in 2020. Ea valued at 150k, survey at 150k, wr accepted 140. 6% below asking (still made a profit).
According to google ans 2024-2025 data the general % below asking that is accepted is 3.4 to 5%.

5% below 500k is 475k.
But 5% below 550k is 522k.
So you need to see what else the same has sold for locally.

Also, if you sold before you moved, what would you have gotten? And how much have they paid in rent for thr last 18 months? Add the profit after youve paid off all.associated costs to what your making from the sale really. If that makes sense. I.e....even at 485k, are you in a better position than if you sold in 2024?