If you are thinking about selling a rental property, the Renters' Rights Act 2025 changes how you go about it. Section 21 no-fault evictions are abolished from 1 May 2026, so you can no longer simply serve two months' notice and wait for the tenant to leave before putting the property on the market. Instead, you have several legal options, and understanding them before you make any decisions will save you time, money, and potential legal headaches.
Ground 1A: The New Possession Ground for Sale
The Renters' Rights Act introduces a brand new mandatory ground for possession: Ground 1A. This allows you to regain possession of your property if you genuinely intend to sell it. You must serve the tenant with four months' written notice using a Section 8 notice specifying Ground 1A. If the tenant does not leave voluntarily after the notice period expires, you can apply to the court for a possession order. Because this is a mandatory ground, the court must grant the order if you can prove your genuine intention to sell. Evidence of that intention could include an estate agent valuation, marketing instructions, or correspondence with a solicitor about the sale.
There is one critical restriction: you cannot use Ground 1A during the first 12 months of a tenancy. If you granted a new tenancy recently, you will need to wait until that 12-month period has passed before serving notice. This restriction is designed to prevent landlords from granting short tenancies and then immediately seeking possession.
Selling With Tenants in Situ
You do not have to obtain vacant possession before selling. You can sell the property with the tenants still living there. The buyer takes on the existing tenancy, including all the rights and obligations that come with it. This is sometimes called selling with tenants in situ.
There are advantages to this approach. You avoid the cost and delay of possession proceedings. The buyer gets an immediate rental income stream, which can be attractive to other investors. You do not need to wait four months for the notice period to expire plus additional time for court proceedings if the tenant does not leave. However, the property will almost certainly sell for less than it would with vacant possession. Owner-occupiers will not be interested, and investor-buyers will factor in the sitting tenant when making their offer. The discount varies, but it can be significant depending on the local market and the terms of the tenancy.
Negotiating a Voluntary Departure
Another option is to negotiate directly with your tenant. You might offer a financial incentive for the tenant to leave by an agreed date. This is sometimes called a cash-for-keys arrangement. There is nothing unlawful about this, provided the tenant agrees voluntarily and is not pressured or harassed. Any agreement should be documented in writing and the tenant should be given a reasonable period to make their decision.
This approach can work well because it avoids the cost and uncertainty of court proceedings, and it gives both parties a degree of control over the timeline. However, you cannot force the tenant to agree, and if they refuse, you will need to fall back on Ground 1A or sell with the tenant in situ.
You Cannot Use Section 21
It is worth stating plainly: from 1 May 2026, Section 21 notices are abolished. You cannot serve a Section 21 notice to clear the property for sale. Section 21 notices served before the Act comes into force will generally cease to have effect. However, where court proceedings on a Section 21 notice have already been commenced before the commencement date, those proceedings may be preserved under transitional provisions — meaning the case can continue to its conclusion even after abolition takes effect. The blanket position that all unexecuted Section 21 notices simply "cease to have effect" does not hold where litigation is already underway. For new cases going forward, the only route to possession for sale is Ground 1A under Section 8, or a voluntary agreement with the tenant.
Impact on Property Value
The question of whether to seek vacant possession or sell with tenants in situ is ultimately a financial one. Vacant possession typically achieves a higher sale price because the buyer pool is wider, including owner-occupiers, developers, and investors who want to refurbish before re-letting. Selling with a tenant in place limits your buyer pool to investors and usually results in a lower price. You need to weigh the potential price difference against the cost of the possession process, including four months of lost or reduced rent during the notice period, court fees if the tenant does not leave, and the time involved.
Practical Steps
If you are planning to sell, here is a sensible sequence to follow:
- Decide whether you want vacant possession or are willing to sell with tenants in situ
- If you want vacant possession, check you are past the 12-month restriction before serving a Ground 1A notice
- Serve the Section 8 notice correctly, specifying Ground 1A and giving four months' notice
- Gather evidence of your genuine intention to sell, such as agent instructions or a valuation
- If the tenant does not leave after the notice expires, apply to the court for a possession order
- Alternatively, approach the tenant about a voluntary departure and document any agreement in writing
Take Action
Planning to sell a rental property? Make sure your paperwork is in order first. Generate your complete document pack to get Section 8 notice templates and a fully compliant tenancy agreement.
Use our Notice Period Calculator to confirm the correct notice period for Ground 1A, or read our full guide on how landlords can regain possession under the RRA.