A tenant in situ is a tenant already living in a property when it is put up for sale, who stays in place after it changes hands. The tenancy does not end on completion. The buyer inherits it automatically, on exactly the same terms, and becomes the new landlord from the day the sale completes.
It is most often seen in buy to let sales, where an investor sells to another investor and the rent continues without a void. You will also see it written as "sold with tenants in situ" or "tenanted sale".
What changed, and changed radically, is what happens next. Since 01/05/2026 the Renters' Rights Act 2025 has governed every private tenancy in England. Section 21 no-fault eviction is gone, and getting a tenant out is now slower, more expensive and, in one important respect, close to irreversible.
That has flipped the economics. Buying a tenanted flat off Northcote Road or a house near Garratt Lane is no longer a matter of taking possession when it suits you. And for sellers, obtaining vacant possession first has become a decision you cannot easily undo.
These two terms get used interchangeably and they should not be. The difference is worth six figures on a south west London property.
An ordinary tenant on a modern assured tenancy, paying market rent. Since 01/05/2026 that means a periodic assured tenancy with no fixed term.
A protected or regulated tenant under the Rent Act 1977. Almost always a tenancy granted before 15/01/1989.
Allsop, whose auction business is the main UK market for this stock, reports that regulated tenancy properties typically sell at 75% to 85% of vacant possession value, with the discount narrowing in recent years and some trading above 90%. The discount is driven largely by the tenant's age and the prospect of succession: a young tenant with a spouse who could succeed sits at the deeper end of the range.
There are now fewer than 75,000 regulated tenancies left in the UK and the number falls every year. If an agent describes a property as having a "sitting tenant", establish immediately which of these two things they actually mean before you value anything.
Almost every guide to this topic written before May 2026 is now misleading. These are the changes that matter to a tenanted sale.
| Still widely published | The position now |
|---|---|
| Serve a section 21 notice to get vacant possession before selling | Section 21 was abolished on 01/05/2026. Any pre-existing notice expired as a route to court on 31/07/2026 |
| Grant the tenant a new assured shorthold tenancy on completion | Assured shortholds no longer exist, and granting a new tenancy restarts the 12 month possession clock against you |
| Deposit breaches only invalidate a section 21 notice | A deposit defect now blocks a section 8 possession order on almost every ground |
| The additional property stamp duty surcharge is 3% | It has been 5% since 31/10/2024. On a £900,000 flat that is £18,000 of difference |
| Give the tenant the current How to Rent guide | That requirement was removed on 01/05/2026 and replaced by a written statement of terms |
| A lender can only use the mortgagee ground if the tenant was warned in advance | Both the prior notice requirement and the rule that the mortgage must predate the tenancy have been removed |
For the wider picture on what the legislation did, our guide to the Renters' Rights Act and its impact on landlords covers the reforms in full.
The tenancy comes with the property. Your questions are whether you can ever get possession, and what you might be inheriting.
You have three routes, and one of them cannot be reversed. The right choice depends on your buyer pool and your tolerance for a void.
The tenancy is an overriding interest. It binds you from the moment you complete, whether or not you have read it. You step into the seller's shoes as landlord on identical terms, and the tenant owes you rent from the completion date onwards.
You do not need a new tenancy agreement, and you should not sign one. That is the single most expensive mistake available on this transaction, for the reason set out next.
Buying the property gives you no right to possession. There is no possession ground for a purchaser as such. You are in exactly the position the seller was in, and you must use a section 8 notice and a Schedule 2 ground like any other landlord.
For most buyers who want to occupy, the relevant ground is Ground 1, which covers the landlord or a close family member moving in. It now requires four months' notice and, critically, the notice cannot expire within the first 12 months of the tenancy.
The 12 month period runs from the start of the current tenancy, not from the date you buy. A sale transfers the landlord's interest; it does not create a new tenancy, so the clock is unaffected by the change of ownership.
If you buy a property where the tenancy began in 2023, you can serve a Ground 1 notice on completion day. If the seller signed a renewal agreement three months before you exchanged, you are locked out of Grounds 1 and 1A for another nine months.
Because Ground 1 needs four months' notice, the earliest you can serve for expiry at month 12 is month 8. On a tenancy that already began more than 16 months ago, you can serve immediately and the notice can expire at the four month minimum.
This makes the date of the most recent tenancy agreement the most important due diligence item on the whole purchase if you intend to occupy or to sell with vacant possession. Ask for every agreement, renewal, variation and addendum. A genuine renewal restarts the clock. A simple addendum extending a term does not.
Four months' notice is the floor, not the expectation. If the tenant leaves at the end of the notice period, four months is realistic. If they do not, you join the court queue.
Ministry of Justice figures for January to March 2026 put the median at 8.0 weeks from claim to order and 26.4 weeks from claim to repossession. London is heavily over-represented, accounting for around 31% of all landlord possession claims in England and Wales, so local waits run longer than the national median.
| Scenario | Time from serving notice |
|---|---|
| Tenant leaves at the end of the notice period | About 4 months |
| Tenant stays, court proceedings needed | About 10 to 12 months |
| Tenancy renewed shortly before you bought | Add up to 12 months before you can even serve |
Those court figures predate the Act coming into force, so they measure the old mix of accelerated and contested claims. With every possession action now contested, waits are widely expected to lengthen. If your plan depends on a firm move-in date, a tenanted purchase is the wrong vehicle.
Since 01/05/2026, if the tenancy deposit is not properly protected and the prescribed information properly served, the court cannot make a possession order on almost any ground. The only exceptions are the serious anti-social behaviour grounds. Previously a deposit defect only invalidated a section 21 notice.
The seller's compliance does not protect you. Case law is clear that a new landlord must protect the deposit and serve fresh prescribed information in their own name. Do it on completion day, and within 30 days at the latest. Getting it wrong exposes you to a penalty of one to three times the deposit, claimable for six years.
On a custodial scheme the registration is transferred to your membership. On an insured scheme the original registration cannot transfer at all, so a new registration has to be set up before the money moves. Your conveyancer should be handling this, but the liability is yours.
Three notices are easy to overlook and each carries a real consequence.
Written notice to the tenant of the change of landlord, with your name and address, by the next rent day or within two months, whichever is later.
Penalty: a fine of up to £2,500.
An address in England or Wales for service of notices on you. Until you give it, rent is not lawfully due, so it cannot fall into arrears.
Effect: undermines any arrears ground.
Where the tenant is a qualifying tenant of a flat, notice of their potential rights of first refusal. Easy to miss on a converted flat.
Penalty: a fine of up to £2,500.
The section 3 and section 48 notices are normally combined into a single letter served on the day of completion. If you inherit a tenant already in arrears and delay the section 48 notice, you may find the arrears are not legally arrears at all.
A tenanted property is still residential property for stamp duty. There is no relief or discount for buying with a tenant in place, and the 5% additional property surcharge applies on the usual test of whether you end up owning more than one dwelling. Our guide to stamp duty on second homes sets out the bands, and conveyancing fees covers the legal costs.
Financing needs care. Most buy to let mortgage conditions were written around the assured shorthold tenancy, which ceased to exist on 01/05/2026. Some lenders have updated their criteria to accept periodic assured tenancies and others have been slow. Two things to confirm in writing before you exchange:
You have three routes. They are not equivalent, and one of them cannot be undone.
Rent runs to completion. No void, no notice period, no restriction afterwards.
Agree terms with the tenant for them to leave, often with an incentive. Keeps your options open.
The selling ground. Four months' notice, and it cannot expire in the tenancy's first 12 months.
Before May 2026 the calculation was simple. You served a section 21 notice, took possession, tested the sales market, and if the sale fell through you re-let the property. That optionality has been abolished.
If you now use Ground 1A, a restricted period applies. During it you cannot let the property on a tenancy of 21 years or less, cannot grant a licence to occupy for money, and cannot market it for either. The restricted period begins when you serve the notice and ends 12 months after the date specified in it, so with a four month notice the practical minimum is around 16 months. Where court proceedings are involved it can run to 20 months.
You serve notice in January intending to sell. The tenant leaves in May. Your buyer pulls out in August. You cannot re-let, and you cannot even advertise it to let, until roughly the following May. The property sits empty with the mortgage running, and marketing it for letting alone is enough to breach the restriction.
This is not a theoretical risk. In July 2026 between 80,000 and 100,000 homes nationally could have been temporarily prevented from returning to the lettings market by this restriction. It is also a live selling risk: 51% of landlord owned properties listed during 2025 did not sell at all, rising to 60% for flats.
The NRLA puts the discount at 5% to 10% against selling to an owner occupier, because the buyer pool narrows to investors who price on yield rather than on lifestyle.
That discount is not fixed. It narrows sharply, and can disappear, where the passing rent is at or near market and the tenant pays reliably. It widens where the rent has been left behind the market for years, because the buyer is pricing the gap between what the property earns and what it should earn.
Rent materially below market. Patchy payment history. Uncooperative tenant making viewings difficult. Compliance gaps in the paperwork. A tenancy renewed recently, locking the buyer out of possession for months.
Rent at market. Clean payment record. Tenancy well established, so the buyer can serve notice immediately if they choose. Full compliance file. A tenant who wants to stay.
Those levers are largely within your control, and working on them before listing is usually worth more than the discount itself. If you are weighing the two routes, a realistic market appraisal on both bases is the sensible starting point, and our note on how long a sale typically takes helps you model the void.
The pattern in that data is the useful part. Landlord to landlord sales are at a record share, and for the first time in seven years landlords are buying more than they are selling. The market is consolidating into fewer, larger holdings, and those buyers actively want stock that is already let and already producing income.
In practical terms that means a well-presented tenanted flat in SW11 or SW18, with a clean compliance file and a tenant paying market rent, has a real and growing buyer pool. That was not obviously true two years ago.
Searches for a "tenant in situ scheme" usually surface an Irish programme, which causes a good deal of confusion.
The Cost Rental Tenant in Situ scheme operates in the Republic of Ireland, run by the Housing Agency. Where a private tenant receives a valid termination notice because the landlord is selling, and the household meets income limits, the state can buy the property so the tenant stays. It has no application in England.
England has no equivalent national scheme. What exists instead is a patchwork of local authority acquisition programmes, funded partly through the Greater London Authority and Right to Buy receipts, aimed mainly at increasing temporary accommodation supply rather than at keeping a particular tenant in place.
Across our own patch, neither Wandsworth nor Lambeth advertises a scheme to buy from private landlords with the tenant remaining. Wandsworth's landlord offer is a letting scheme rather than an acquisition one, and Lambeth's programme is focused on buying back former council stock. Merton approved £35.1m in July 2026 to acquire homes, but has published no tenant in situ policy.
There is also a caveat worth knowing. A Local Democracy Reporting Service investigation in July 2026 found that a third of London councils did not know whether tenants were being evicted when they bought properties for temporary accommodation, and identified cases where tenants were displaced by such purchases. A council purchase is not a guarantee that your tenant stays.
If keeping the tenant housed matters to you, the practical route is to approach the borough's housing solutions or homelessness prevention team directly and ask whether they have acquisitions funding and whether they will buy with the tenant in place. There is no scheme to apply to.
This situation is more common than it sounds, particularly with long-standing tenants and family arrangements. It does not mean there is no tenancy.
A tenancy arises from exclusive possession of a dwelling for a term at a rent, written down or not. Since 01/05/2026 any such arrangement in the private sector is a periodic assured tenancy with the full protection of the Housing Act 1988, including the possession regime, deposit rules and repairing obligations.
What applies are the terms actually agreed, plus everything implied by statute. Rent periods are capped at one month and rent can only be increased by statutory notice, once a year, on two months' warning.
First, establishing when the tenancy began becomes an evidential exercise, and it determines your possession position. Nail it down before exchange with a rent ledger, bank statements and a statutory declaration from the seller.
Second, assume the seller may never have complied with the written statement of terms requirement. Treat providing one as an immediate post-completion job. Failure carries a civil penalty of up to £7,000, and you remain liable even if an agent is acting for you.
This is often the cleanest outcome available and it is worth raising early. The tenant knows the property, there is no chain below them, no void, and no possession problem to solve. Viewings are straightforward for obvious reasons.
Two points to handle properly. If the property is a flat and the tenant is a qualifying tenant, rights of first refusal under the Landlord and Tenant Act 1987 may apply to the sale in any event, which is a matter for your solicitor rather than an afterthought. And a sale to a sitting occupier still needs an independent valuation, because the absence of competitive bidding makes it easy to leave money on the table in either direction.
The right answer turns on the passing rent, the date of the current tenancy agreement, the state of the compliance file and how long you can carry a void. Those are specific facts, and the difference between the two routes is usually larger than people expect.
We handle sales and lettings across Battersea, Clapham, Balham, Wandsworth and Earlsfield, and we can appraise a property on both a tenanted and a vacant possession basis so you are comparing real numbers rather than assumptions. Our landlord services and property management pages set out how we work with landlords on the patch.
A tenant in situ is a tenant already living in a property at the point it is sold, who remains in place after completion. The tenancy does not end when the property changes hands. The buyer inherits it automatically on the same terms and becomes the landlord from the completion date.
It means the property was sold with the tenancy continuing rather than with vacant possession. The buyer takes on the existing tenant, the existing rent and the existing terms. It is common in buy to let sales, where an investor sells to another investor and the rental income continues without a void.
Not simply because you have bought it. Buying the property gives you no possession right, and section 21 no-fault eviction was abolished on 01/05/2026. You must use a section 8 notice and a statutory ground. If you want to move in yourself or house a close family member, Ground 1 requires four months' notice and the notice cannot expire within the first 12 months of the tenancy. That 12 months runs from when the tenancy began, not from when you bought.
No. The tenancy binds the buyer as an overriding interest and continues unchanged. No new agreement is needed, and granting one is a mistake, because a genuine new tenancy restarts the 12 month clock that governs the moving in and selling grounds.
The NRLA puts the discount at around 5% to 10% against a sale to an owner occupier, because the buyer pool narrows to investors. The gap narrows or disappears where the rent is at market and the tenant pays reliably, and widens where the rent has fallen behind or the paperwork is incomplete. A genuine regulated tenancy is different territory: Allsop reports those trading at 75% to 85% of vacant possession value.
A tenant in situ is on an ordinary modern tenancy at market rent. A sitting tenant, used properly, means a protected or regulated tenant under the Rent Act 1977, almost always from a tenancy granted before 15/01/1989. Regulated tenants have lifetime security, a fair rent set by the Valuation Office Agency that is usually well below market, and succession rights. The two are frequently confused and the value difference is substantial.
Yes. The seller's compliance does not cover you. You must protect the deposit in your own name and serve fresh prescribed information, ideally on completion day and within 30 days at the latest. This matters more than it used to: since 01/05/2026 a deposit defect prevents a court making a possession order on almost any ground, not merely invalidating a section 21 notice as before. The penalty is one to three times the deposit and is claimable for six years.
Usually yes, but confirm the detail in writing before exchanging. Most buy to let mortgage conditions were drafted around the assured shorthold tenancy, which no longer exists. Check that your lender accepts a periodic assured tenancy, and that it will lend on a property already let. Some lenders require a new tenancy to be granted on completion, which is now impossible and would in any case restart your possession clock.
The presence of a tenant changes nothing for stamp duty. A tenanted home is still residential property, and the 5% additional property surcharge applies on the normal test of whether the purchase leaves you owning more than one dwelling. Note the surcharge rose from 3% to 5% on 31/10/2024, and a good deal of published guidance still quotes the old figure.
Vacant possession usually achieves a higher price, but since 01/05/2026 it is close to irreversible. Using the selling ground triggers a restricted period during which you cannot let or even market the property for letting, running roughly 16 months from service of the notice. If the sale falls through you are left with an empty property you cannot lawfully let. Weigh the 5% to 10% tenanted discount against that risk, and consider negotiating a voluntary surrender as a middle route that keeps your options open.
Only through the statutory process. Contractual rent review clauses became unenforceable on 01/05/2026. You may raise the rent once in any 12 month period, by statutory notice on the prescribed form, giving at least two months' notice. The tenant can challenge it at the First-tier Tribunal, which can confirm or reduce your figure but can no longer set a higher one.
This guide covers England only and reflects the position as at 15/08/2026. Scotland, Wales and Northern Ireland operate separate systems. The Renters' Rights Act 2025 is available at legislation.gov.uk and the government's landlord guidance at GOV.UK. Possession timings are from Ministry of Justice statistics. Market data: NRLA and Allsop. Rampton Baseley are estate and letting agents, not solicitors or tax advisers. Nothing here is legal, tax or financial advice, and you should take professional advice on your own circumstances before acting.