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.

If they had been there 30+ years then I’d consider their offer but not for someone who has been there a couple of years.

I would work out how much it would cost to put it up with the EA and if it works out a similar price then I’d offer it to them.
But if it’s still significantly different then I’d tell them straight you’re putting it up for sale and if you don’t get any offers over £500 then you’ll offer it to them.

You’re not a charity case and you don’t owe them anything.
Why should you lose out on 1000s purely because they’ve been your tenants.

Quite a few estate agents inflate property prices to sign you up. You should look at sold prices (Zoopla and Rightmove have these). Each property for sale shows sold prices for similar properties within ¼ mile so find a similar property in your post code. I disagree that the market has picked up. There are also a lot of property going onto the market as landlords are pulling out of the PRS because of new legislation. IMHO it s a buyers market atm.

The tenants will be aware of the value of houses nearby. If you sell well below, there’s nothing stopping them selling up and asking for £550k themselves.
Id send them a copy of the estate agent valuation and say you need something closer .

You can’t give strangers £50k when you need it for your own family

if I won the lottery I would happily give a fuck ton away, this is not your situation

Please tell me what happened.
When I went to view a house with tenants a baby was asleep in one room, a teenage boy playing violent games in another and the dad was smoking weed in the kitchen making a spaghetti bolognaise.
I can’t even remember what the house looked like just them 😬

You’ll be selling with tenant in situ though which will reduce the value. The rules about tenancies are changing in May so you need to take into consideration that asking them to leave will not be easy. I’d try and get them to increase to 500k and take their offer. www.nrla.org.uk/news/renters-rights-act-commencement-ben-beadle

have you actually made them a counter offer?

We were really keen to sell to our tenants as it was going to make everything so much easier but they put in an offer way below the EA valuations. Their reasoning being that they were entitled to a discount equivalent to the amount they had paid in rent over the 3yrs they had been there!🤔
We weren't too happy about that and along with a couple of other things that niggled us, we decided to sell on the open market. This shocked them and as the realisation set in that they were going to have to move, they (eventually) offered the EA valuation. By then however, offers were being received considerably above the asking price so they were completely priced out.
They moved out on time (always a worry🤞) and the house was sold for well above top EA valuation (very desirable location).

What state is the house actually in? I am selling my parents house (deceased). The estate agents pricing was £525,000 which would be the price for pristine houses in the area, but I am actually selling for £485,000 (have accepted an offer) which I think reflects the work that needs doing.

Remember that the cost of handling sale enquiries and doing viewings, is incredibly small compared to the cost of keeping a house serviceable, whether empty or with tenants. For the estate agent, getting 1% for £550 instead of 1% of £485 is probably worth a few more months on the market and a few more viewings. For you, looking after the house for a few more months, the costs involved, and the hassle of arranging other viewing around the estate agents, potential buyers, and tenants, may well not be.

Round us 90% of houses go for above asking

Don't walk away from 60k because they're lovely... think about your retirement things you might want to do to be comfortable as you said help the kids.
I'd politely decline unless they come up with a higher offer on what it's truly worth .

I'm suspicious of them offering you 420K when they must have known it's worth 100K more than that!

Use websites that tell you how much houses in that area have sold for.

If it's justified, then say that really it's worth £550K but you'd be happy to accept £500K. If they are paying the rent on that, they should be able to afford a mortgage for it!

I think in your position I would sell it to the tenants for as little as I could feel comfortable selling it. That might be £485k for you, or it might be £500k. You do need to make sure you're truly happy with the sale to avoid resentment or regret.
It's so nice that you want them to have the house, but if they can't afford a fair price, then that is a shame for them, but isn't really your issue to solve.
You sound like a really lovely landlord and I so hope this works out for you and your tenants.

It may not be that sus. If the estate agents said 500k is the lower end, it's probably about what it's worth unless OP happens to be in a particularly 'hot' area. If they're looking to buy a house and have done any research, they'll know it mostly isn't a sellers market. They may have an idea OP really needs to sell and have left themselves lots of room to negotiate, especially as they have months left on their tenancy. I'd have gone a bit higher as a lowball offer probably, but in their shoes I wouldn't consider myself to have offered 100k below what it's worth either.

I would tell them it needs to be £500k and see what they say.

I would work out how if they left and property was empty for six months what it would cost. Lost rent, rates, mortgage payments, insurance (higher for empth property), electric standing charges etc. Yes £65k alot but these costs soon mount up. Plus selling to tenants would be chain free so simple/quick. At that value would probably get stuck in a long drawn out chain.
Agents always inflate to get business if want a realistic price pay for a red book valuation from a chartered Surveyor

What you need to ask yourself is whether you think you should give your tenants £60k rather than your own family? If your estate agents are correct, and this is a good property in a popular area then this is basically what you're suggesting you do. That's a LOT of money! Put it on the market, see what offers you get and then ask your tenants to match the best offer. Then you are giving them first refusal. That's more than fair.

It's much, much easier to sell to the tenants than on the open market - you're very unlikely to sell with sitting tenants and getting them out could be a lengthy and expensive process.

Worst case scenario they damage the property, stop paying rent and refuse to leave.

Id say to them 500k and it's theirs.

Please, urgently, read up on the Renters Rights Act 2025. The single largest change to the rental market in 40 years. Your fixed term , as I understand it , is likely to cease on 1st May 2026 not Nov as you have indicated. Your AST (if that is what you have) will automatically roll into an Assured Periodic Tenancy (APT). I am not a professional nor an advisor but I have been following this topic closely. You need to be aware that you will need to serve 2 months Notice for your tenants to leave. If the grounds for eviction are that you are wanting to sell , which is an acceptable reason, please be aware that if the sale falls through you are not permitted to rent it out again until 12 months have elapsed. This should be factored into your decision making. What is the risk , if as you say, you rely on the rent to pay the mortgage?
Good luck.

As PPs have said, estate agents inflate the value of properties. If you've been given a guide of £500k to £550k, you are likely looking at under £500k. Every couple of months on the market they will suggest you lower the price. From what I can tell they put very little effort in, relying on Rightmove etc. to do the work for them.

We are trying to sell inherited properties; one has been on the market 6m+ and reduced twice, the other has been on for longer and has also been reduced twice. It's supposedly sstc but 5 months after agreeing a price (a further reduction) the buyer is still dragging his heels.

I would sell to the tenants. Push them hard for a higher price, but accept their current offer if that's their maximum. You have the benefit of no loss of rental income while the sale proceeds, if they leave the place in a mess it's not your problem, you won't have the hassle of getting them out or them not agreeing to viewings.

Good luck, I hope it goes well whatever you decide.

Thank you all so much.
their tenancy was due to end November, though I know it will roll on to an AST from may. I would absolutely not disrupt this, they have very young kids and are very keen to get into the local outstanding schools for which they need to be in catchment.
i have looked more closely at sold values. Quote from right move: Overall, the historical sold prices in Xxxx over the last year were 17% up on the previous year and 3% up on the 2022 peak.
(this is directly linked to schools admission criteria changing)
given this I think I’m going to to back to tenants and say I can accept a min of 500k. With EA fees of 1% that gets me into valuation territory. Then if they cannot manage that I can offer them first refusal on open market.
does that sound fair?

Have you consider paying for a rics valuation?

After May this year under the renters rights act you have to give 4 months notice to your tenants if you want to sell the property. If for some reason the sale falls through you are not allowed to re-let for 12 months (although not entirely sure who would police this!) - ie selling becomes a huge risk with a lot of potential financial downsides. Selling to your tenant really is the ideal scenario

yup, generous even considering they are keen to stay in catchment.

It’s 4 months notice by the landlord if wanting to sell or move in