More than 8,500 properties currently being marketed for sale across England already have tenants living in them, according to analysis from The Letting Partnership.
The research identified 8,553 homes being advertised with tenants in situ, representing around 1.8% of the 470,922 properties currently listed for sale.
Yorkshire and the Humber has the highest proportion of these properties. The region has 1,575 tenanted homes for sale, accounting for 5.1% of its 31,143 available listings.
The North West has the largest number overall, with 2,227 properties being marketed while occupied by tenants. This accounts for 4.6% of the region’s sales stock.
The North East follows with 4.3%, while London has one of the lowest proportions at just 0.3%.
Yorkshire Leads the Market
The figures highlight significant regional differences in the number of tenanted properties being offered to buyers.
Yorkshire and the Humber’s 5.1% share is considerably higher than the English average, while the North West also has a substantial proportion of occupied homes available for purchase.
Elsewhere, the proportion is much lower. Tenanted properties account for 0.7% of listings in the South West and 0.9% in the South East.
These figures should not necessarily be viewed as a direct measure of landlords leaving the rental market. The type of property being sold and the buyers being targeted can also influence the number of tenant-in-situ listings.
For investors, however, an occupied property can provide an opportunity to generate rental income from completion rather than having to find a tenant after purchasing.
Buying a Property With a Tenant in Place
Purchasing a tenanted property is different from buying an empty home.
The buyer is effectively taking on an existing tenancy, which means they need to understand the agreement, rental payment history and any issues affecting the tenant before completing the purchase.
The advertised rental yield may look attractive, but it is only one part of the calculation.
Buyers should establish the current rent, check whether payments are up to date and understand the terms of the tenancy. They should also determine whether there are any outstanding maintenance issues or arrangements that could affect the property’s future income.
Sellers should make this information available as early as possible. Clear documentation can make the property more attractive to investors who are specifically looking for an income-producing asset.
Deposit and Rental Records Need Checking
Due diligence is particularly important where a tenancy already exists.
Before committing to the purchase, buyers should review the tenancy agreement and any subsequent changes, alongside rent records and information about arrears.
The tenancy deposit should also be checked carefully.
Government guidance requires qualifying tenancy deposits to be protected within 30 days of being received. Buyers and sellers therefore need to establish where the deposit is held and ensure the relevant information is correctly dealt with when ownership changes.
Any existing arrangements concerning the deposit should be understood before completion to avoid problems later.
Rent Payments Can Affect Completion
The timing of completion can also create additional administration.
If the tenant has already paid rent covering a period that extends beyond completion, the amount may need to be apportioned between the buyer and seller.
The completion statement should make clear how any rent already collected is being dealt with.
Buyers should also establish whether there are outstanding rent payments, repayment arrangements or other agreements with the tenant. Keeping accurate records can help prevent disagreements after the property changes hands.
A Tenant Does Not Remove All Risk
An occupied property can provide immediate rental income, but that does not necessarily make it a lower-risk investment.
The existing rent could be below the level the buyer expects to achieve, while incomplete paperwork or property maintenance issues could create additional costs.
There may also be limitations on how quickly a buyer can make changes to the property or seek possession, depending on the circumstances and tenancy arrangements.
This means investors should assess the tenancy alongside the physical property rather than focusing solely on the headline rental yield.
What Does This Mean for Landlords and Investors?
For landlords selling a property with a tenant in place, the latest figures suggest there is an established market of potential buyers looking for income-producing properties.
Providing a complete tenancy file, accurate rent records and clear information about the property’s condition could make the sales process easier.
For buyers, the opportunity to receive rental income from the outset can be appealing, particularly for investors who want to avoid a vacant period.
However, the existing tenancy needs to be properly assessed before the purchase. A strong yield on paper does not necessarily mean the property will deliver the expected return once maintenance, compliance and tenancy-related issues are taken into account.
The regional figures show that tenant-in-situ sales are particularly significant in parts of northern England, with Yorkshire and the Humber and the North West accounting for some of the highest shares.
For investors considering these properties, the key is to value the tenancy as well as the property itself. Immediate rental income can be an advantage, but only when the underlying paperwork, rent position and tenant arrangements are properly understood.
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