The Renters’ Rights Act has been in force for four months – enough time to monitor the fall out. While it didn’t steal the headlines at the time, the new Ground 1A possession ground is already having an impact.
What is Ground 1A?
Ground 1A - sale of dwelling house – is a new possession ground that landlords must use if they want to their buy-to-let with vacant possession. Essentially, it restricts when a landlord can sell and what happens in the following year.
Serving a Ground 1A explained
- Ground 1A is a mandatory ground attached to Section 8 notices
- Ground 1A allows landlords to evict tenants so they can sell with vacant possession
- Ground 1A can’t be used in the first 12 months of a new tenancy, unless there is a compulsory purchase order and the property is being sold to the acquiring authority
- When Ground 1A become valid, the landlord must give the tenant four months’ notice
- A landlord can’t use Ground 1A if their tenant has an assured tenancy created before 1st May 2026 that was not an assured shorthold tenancy
- There is a restricted period that lasts for 12 months, starting when the Section 8 notice is served
- A landlord is not allowed to market the property themselves, or via a letting agent, during the restricted period
- A landlord must not create a new residential tenancy at the property within the restricted period
What happens if my buy-to-let doesn’t sell?
Landlords who have successfully used Ground 1A to evict their tenant are, realistically, at the start of their journey. Their buy-to-let exit will only conclude once a property sale has completed. Landlords will be at the mercy of the open market. If there are no offers or a sale falls through, the property has to remain on the market for a year or be removed as a listing.
The landlord can’t cut their losses and relet the property to receive rental income. Marketing the property as an available let or creating a new tenancy is strictly prohibited within the 12 month restricted period.
Why isn’t my property selling?
Landlords will be relieved that the Renters’ Rights Act included a way for them to regain possession to sell. Ground 1A solves part of the problem but it isn’t a cure all if you’re looking for a quick exit. If there’s a surplus of homes for sale, high mortgage rates or economic uncertainty (currently all apply), selling a former buy-to-let can be challenging.
Is it a good time to sell property?
Rightmove’s August House Price Index revealed it’s currently taking 63 days to find a buyer. After that, it’s taking an average of 3 to 4 months to move from offer to completion. Adding to the picture are asking prices that are being slashed by sellers to attract interest. New-to-market properties were advertised for 2% less in August when compared to July. The sales landscape is weakened further by more homes for sale now than we’ve seen at this time of year since 2014.
Consequences for breaching Ground 1A restrictions
Landlords who breach Ground 1A’s rules can be punished. The local authority can fine the landlord up to £7,000 or there can be a Rent Repayment Order, with landlord repaying up to 24 months’ of rent.
The landscape created by Ground 1A has led to one property specialist claiming it’s ‘too much of a risk’ to sell a rental property. Speaking to Property Industry Eye, Mark Dawon at AST Assistance said the 12-month ban on re-letting a property after using a Ground 1A notice had removed an important safety net for landlords.
Can you sell with sitting tenants?
Selling property with sitting tenants is the logical alternative for landlords who want to quit and not risk void periods and a loss of income.
When you sell with tenants in situ, the tenancy is unbroken. The landlords selling up receives rental income until the day the property completes, with the tenancy passing on to the buyer. There’s no need to serve a Section 8, use Ground 1A, wait 12 months or give 4 months’ notice.
A guaranteed buyer for your property
Selling to a professional property purchaser bypasses the entire Ground 1 A vacant possession issue. For example, LandlordBuyer specialises in buying tenants properties from landlords. We make a cash offer, whatever the market conditions, and guarantee to see the transaction through to completion. We also buy flats with short leases, problem properties and buy-to-lets where the tenants are in arrears.
With LandlordBuyer, the tenant stays in the property undisturbed - no notice is served. The landlord enjoys rental income until completion, then receives cash in their bank from the sale. We typically exchange within 28 days of a cash offer being accepted, and can complete 7 days after. No waiting for the market to pick up or lending conditions to improve. And no trying to cover mortgage repayments and void period bills without an income stream. Selling with sitting tenants is the guaranteed market exit Ground 1A can’t deliver.
LandlordBuyer is the low-cost way to sell: we won’t charge an agency fee, we will cover your legal costs and we’ll pay for your EPC, should you need one.
Start with a free cash offer or chat to us about your specific circumstances.