How to recover service charges from tenants
For many landlords, the decision to sell a property portfolio is no longer driven solely by market conditions or personal circumstances.
Recent changes announced in the Autumn Budget, alongside higher borrowing costs, increased regulatory pressure and ongoing reform of the private rented sector in the new Renters’ Rights Act, are prompting many property owners to reassess their position.
If you are considering exiting the market, whether in full or in part, the legal process requires careful planning.
Portfolio sales involve multiple layers of legal risk, particularly where properties are tenanted, mortgaged or held through different ownership structures, such as a limited company or trust.
Addressing these key legal issues early can avoid delays, disputes and unexpected liabilities as you sell your property portfolio.
Why more landlords are leaving the market
The 2025 Autumn Budget introduced a number of changes that significantly affect sole trading landlords and property investors.
From April 2027, new standalone property tax rates will apply, with:
- The basic rate increasing to 22 per cent
- The higher rate rising to 42 per cent
- The additional rate reaching 47 per cent
When combined with frozen Income Tax thresholds and increased taxation on savings and dividend income, many landlords will face higher overall liabilities.
For some landlords who report their income via Self-Assessment, this is prompting a decision to dispose of part or all of their portfolio.
High value property owners are also factoring in the introduction of the so-called “mansion tax” on properties valued above £2 million.
These changes are influencing decisions not only about selling, but also about restructuring ownership or passing assets to family members as part of longer-term estate planning.
Whilst no decision should be made without proper tax advice, these pressures mean that legally efficient sales are becoming increasingly important and time sensitive.
Beyond these additional costs, many landlords are also concerned about the introduction of the Renters’ Right Act, which gives tenants more rights and restricts the grounds under which they can be evicted should something go wrong.
With the first stages of this act coming into power from 1 May 2025 it is prompting more landlords to reassess their position.
Establishing a legally sound disposal strategy
One of the first legal questions is whether you are selling the entire portfolio or disposing of individual properties.
This decision will affect how transactions are structured and the level of complexity involved.
Factors to consider include:
- Whether properties are held personally, jointly or through a company
- The presence of existing mortgages or charges registered against title
- Whether properties are subject to restrictive covenants or rights affecting sale
- Exposure to regulatory change or ongoing compliance costs
A phased sale may help manage tax exposure, but it also increases the risk of inconsistent documentation, overlapping liabilities and prolonged legal obligations.
A full exit often requires more intensive preparation but can be legally cleaner if handled correctly.
Title, documentation and due diligence
From a legal perspective, portfolio sales often expose issues that are less obvious in single-property transactions.
Common problems include:
- Incomplete or defective titles
- Missing planning permissions or building regulation approvals
- Historic alterations not properly documented
- Unresolved boundary or access issues
Buyers will carry out detailed due diligence, particularly where multiple properties are involved. Any defects can delay completion or be used to renegotiate price.
Reviewing titles and supporting documentation at an early stage allows issues to be resolved before properties are marketed.
Tenanted properties and possession risks
Whether properties are sold with tenants in situ or with vacant possession has significant legal implications.
Selling with tenants in place may appeal to investor buyers, but it narrows the market and requires careful review of tenancy agreements, deposit protection compliance and statutory obligations. Any non-compliance can undermine a sale or expose you to claims.
If vacant possession is required, notices must be served correctly and lawfully. With ongoing reform to landlord and tenant law and increasing scrutiny of possession claims, errors can be costly.
Invalid notices, missed deadlines or procedural mistakes can delay sales and reduce buyer confidence.
Timing and contractual risk
Market conditions remain relevant, but from a legal standpoint the priority should be transactional certainty.
Exchange and completion dates may need to be coordinated across multiple sales, particularly where proceeds from one disposal are funding the next.
Clear contractual planning is essential to manage:
- Conditional contracts
- Long-stop dates
- Simultaneous exchanges and completions
- Exposure if one transaction falls through
Without careful sequencing, landlords can find themselves contractually bound without the funds to complete.
Tax planning within the legal framework
Tax considerations sit alongside, rather than outside, the legal process. Capital Gains Tax, Income Tax and future exposure to new property tax rates should be assessed in advance, particularly where properties are jointly owned or held within corporate structures.
Transferring property to family members, restructuring ownership or selling through different entities all carry legal and tax consequences.
What may appear efficient from a tax perspective must also be legally robust and compliant, so it is best to work with professional advisors that have a close existing relationship.
Legal support for a controlled exit
Selling a property portfolio is not simply a scaled-up conveyancing exercise. It requires strategic legal oversight, coordination with tax advisers and careful management of risk at every stage.
Our residential property teams regularly advise landlords on portfolio disposals. We work closely with other professional advisers to help ensure transactions are structured correctly, documentation is in order and sales progress efficiently with minimal disruption.
If you are considering selling all or part of your property portfolio, taking legal advice early can make the difference between a fragmented exit and a controlled, well-planned transition.
Please get in touch to learn more about our services.
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