How Do I Sell My House Privately to a Friend?

Yes, you can sell your house directly to a friend, and you'll save the estate agent's commission — typically 1–1.5% plus VAT, so £3,200–£4,800 on an average UK home. Everything else stays the same. You each need your own conveyancer, you still complete the TA6 and TA10 forms, searches still get done, and contracts still have to be exchanged. The complications only start if you sell at a discount: that touches the buyer's mortgage, potentially inheritance tax, and — if it isn't your main home — capital gains tax. Check your existing agent contract before you agree anything, because sole selling rights can leave you owing commission on a buyer you found yourself.

What you actually save

Start with the honest number, because it's smaller than people assume. High-street agents typically charge 1–1.5% plus VAT on a no-sale-no-fee basis. On a home at the UK average of around £268,000, that's roughly £3,200 to £4,800 including VAT. Online and fixed-fee agents charge £999–£1,999. That's your saving, and it's real money — but it is the only line that disappears.

Note the line I'd add rather than remove: a proper RICS valuation. Selling through an agent, you get a free (if optimistic) opinion of value. Selling to a friend, nobody is giving you one, and the price is the thing most likely to sour the relationship two years later when one of you decides it was unfair. £400 for an independent, written, defensible figure is the best money in the whole transaction. Our guide to how much your house is worth covers what to gather before you instruct anyone.

The trap nobody warns you about: your existing agent contract

If your house is already on the market, stop and read your agency agreement before you shake hands on anything. This is where private sales go expensively wrong.

Sole agency means the agent is your only agent, but if you find the buyer independently, you generally don't owe commission. Sole selling rights is different and much harsher: the agent is entitled to their fee on a sale during the term regardless of who introduced the buyer — including a friend you've known for twenty years. Some contracts also carry a "ready, willing and able purchaser" clause, which can make a fee payable even if the sale never completes.

Then there's the tie-in period and the notice period. A typical agreement runs 12–16 weeks with 14–28 days' notice, and many include a post-contract introduction period of six months or more, meaning the agent can still claim a fee on anyone they introduced during the term. If your friend ever viewed the house through the agent — even casually, even before they were a friend rather than a viewer — that claim may well stand.

Agreeing a price you can both live with

There are only two sensible approaches, and mixing them is where it gets messy.

Option one: full market value. Get a RICS valuation, or take three agent valuations and use the middle one, and sell at that. Clean, boring, no tax questions, no lender questions, and neither of you can feel aggrieved later. Your friend still wins, because they avoid a bidding war, a chain and the risk of being gazumped.

Option two: a deliberate discount, openly stated. Perfectly legal. You simply need to understand what it triggers, document it, and both go in with your eyes open. What you must not do is quietly agree a low figure without a valuation on file — because then nobody knows how big the gift actually was, including HMRC, and including your friend's lender.

Whichever you choose, get the valuation done first. Deciding the price and then finding a valuation to justify it is the wrong way round and everyone can tell.

Selling below market value: the four things it touches

This is the part of the question that actually matters, and most articles wave at it. Here's the detail. None of this is tax advice — the amounts turn on your circumstances and you should take proper advice from a solicitor or accountant before you commit.

1. Stamp duty — usually simpler than people expect

Stamp Duty Land Tax in England and Northern Ireland is charged on the chargeable consideration — what your friend actually pays — not on what the property is worth. So if the house is worth £300,000 and they pay £250,000, their SDLT is calculated on £250,000. The 2026 bands are 0% up to £125,000, 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% to £1.5m and 12% above that. First-time buyers pay nothing on the first £300,000 and 5% between £300,001 and £500,000, with no relief at all above £500,000. Anyone buying an additional property pays a 5% surcharge on top of every band. The return and payment are due within 14 days of completion.

Two exceptions worth knowing. If the buyer is a company connected to you, market value is substituted for the price paid, so the discount buys nothing. And in Scotland it's Land and Buildings Transaction Tax, in Wales Land Transaction Tax, both with their own bands — use the Revenue Scotland or Welsh Revenue Authority calculators rather than assuming the English numbers.

2. Capital gains tax — only if it isn't your main home

If the property has been your only or main residence throughout your ownership, Private Residence Relief normally means no CGT, whatever you sell it for. That covers most people reading this.

If it's a second home, a buy-to-let or an inherited property you never lived in, CGT applies at 18% or 24% on the gain depending on your income tax band, and a residential property return must be filed and the tax paid within 60 days of completion. Here's the sting: where a disposal isn't a bargain made at arm's length, HMRC can substitute the property's market value for the price you actually received. Sell a £300,000 rental to a mate for £220,000 and you can find yourself taxed on a gain calculated from £300,000 while only £220,000 landed in your account. Take advice before you agree the figure, not after.

3. Inheritance tax — the seven-year clock

The discount is a gift. Sell at £250,000 what's demonstrably worth £300,000, and you've made a £50,000 gift, which is treated as a Potentially Exempt Transfer. Survive seven years and it falls out of your estate entirely. Die within seven years and it's brought back into the inheritance tax calculation, with taper relief reducing the tax after year three. The £3,000 annual exemption can be set against it. For most estates this changes nothing, but if yours is anywhere near the nil-rate band it's worth modelling before you sign.

Separately: if you sell cheaply to a friend but carry on living in the property rent-free, that's a gift with reservation of benefit and the seven-year clock doesn't help you. That arrangement needs specialist advice, not a website.

4. The buyer's lender — the practical hurdle

If your friend needs a mortgage, this is the constraint that actually decides whether the deal happens. Buying below market value is a concessionary purchase, and the discount is treated as gifted equity which can count towards their deposit.

The catch is that most lenders restrict concessionary purchases to family, and only a minority will accept them between friends — Virgin Money, TSB, Barclays and various specialist lenders are among those that may, subject to criteria that change regularly. Expect the underwriter to ask, in writing, why you're selling below value and what your relationship is. Expect the maximum loan to be capped at the discounted purchase price even where the valuation is higher. And expect a requirement that you vacate on completion; nearly every lender that permits these wants vacant possession. A whole-of-market broker is genuinely worth using here — this is not a case for going direct to a high-street branch.

A worked example

Say your house is independently valued at £300,000. Your friend Dan is buying it, he's not a first-time buyer, and it's his only property. You agree £270,000 — a £30,000 discount — because you'd rather have a certain, chain-free sale to someone you trust than four months on the open market.

So the £30,000 discount costs you about £25,900 net once the saved commission is netted off, Dan saves £1,500 in stamp duty on top of the £30,000, and you both save roughly three months. Whether that's a good trade depends entirely on how much certainty and speed are worth to you — but at least now it's a decision rather than a vague feeling that you're doing each other a favour.

One more figure to keep in view: the £30,000 discount is also a PET, so if you died within seven years it could come back into your estate for inheritance tax.

The legal process, step by step

It is the ordinary conveyancing process. Skipping steps because you trust each other is the single most common mistake in private sales, and it's the one that produces problems years later when one of you sells on.

1. Agree heads of terms in writing. Price, what's included, target exchange and completion dates, who pays for what, and what happens if the survey finds something. An email you both reply "agreed" to is enough. It isn't binding — nothing is until exchange — but it stops the "I thought we said..." conversation.
2. Each instruct your own conveyancer. Separate firms. Tell them at the outset that it's a private sale between friends and, if relevant, below market value, so they can advise properly and flag the lender and tax points early.
3. Get your EPC. Valid for ten years; you still need one and it's a legal requirement to have commissioned it.
4. Complete the TA6 Property Information Form and TA10 Fittings and Contents Form — plus TA7 if it's leasehold. Fill them in properly and honestly. Friendship does not reduce your disclosure obligations, and a knowingly false answer on a TA6 is actionable long after completion.
5. Searches and enquiries. Local authority, drainage and water, environmental. If Dan is borrowing, his lender will insist. Even if he's a cash buyer, he should still do them.
6. Survey. A RICS Level 2 or Level 3 survey. Encourage it — a buying friend who skips the survey and finds a problem afterwards is a friendship in trouble.
7. Mortgage offer and valuation. Where the concessionary-purchase questions surface. Allow extra time.
8. Exchange of contracts. Now it's binding, deposit paid, completion date fixed.
9. Completion. Funds transfer, your mortgage is redeemed, keys handed over, the TR1 transfer is signed and the buyer's conveyancer files the AP1 application with HM Land Registry. SDLT return within 14 days.

Expect eight to twelve weeks with no chain — quicker than the 16 to 24 weeks a typical open-market sale takes, largely because you've removed the two slowest variables: finding a buyer and waiting on everyone else's chain.

One thing that will not be relaxed: anti-money-laundering checks. Both conveyancers must verify identity and source of funds regardless of how well you know each other. Have your documents ready and don't take it personally.

When selling to a friend is a bad idea

I'd think twice in these situations, and in a couple of them I'd walk away.

Your finances are shaky. If there's any prospect of bankruptcy, a transaction at an undervalue can be challenged and unwound by a trustee for up to five years afterwards. Your friend could lose the house. Take insolvency advice first — this is not a risk to discover later.

You bought under Right to Buy in the last five years. The discount is repayable on a sliding scale, and the council usually has a right of first refusal for the first ten years. Check your title before you agree a price.

Care fees are on the horizon. Selling well below value to preserve wealth can be treated as deliberate deprivation of assets under the Care Act 2014, and the local authority can assess you as though you still owned it. Get advice.

Your friend can't actually fund it. "I'll get a mortgage" is not a plan. Ask for an agreement in principle and proof of deposit before you take the house off the market. Being strung along for four months by someone you can't chase hard is worse than any agent.

You need a specific price to move on. If the sale has to produce a certain sum to clear your mortgage and buy your next place, don't discount to be nice. Do the sums first.

The friendship is already fragile. Property transactions apply pressure. If you're already walking on eggshells, this will not improve things.

Keeping the friendship intact

A few rules that cost nothing and prevent most of the fallout.

• Everything in writing, nothing in the pub. Not because you distrust each other, but because memory is unreliable and money makes it worse.
• Let the conveyancers be the bad guys. When there's a difficult enquiry, route it through them. That's what they're for, and it keeps friction out of the friendship.
• Set a deadline and mean it. "We're aiming to exchange by the end of October; if we're not close by then we'll both reconsider." Open-ended timelines are how private sales drift for a year.
• Disclose everything, including the annoying things. The neighbour dispute, the boiler that's on its last legs, the flat roof. If they find out afterwards, the friendship takes more damage than the money ever would.
• Agree what happens if the survey finds something. Decide the principle before you know the answer — split the cost, reduce the price by the quote, or seller fixes it. Far easier to agree in the abstract.
• Give them permission to walk away. Say it out loud, early. It takes the pressure off and makes it far more likely they'll be honest with you if the deal stops working.

If speed is the real reason you're doing this

Plenty of people consider selling to a friend not because it's ideal but because the open market feels slow and uncertain — and fairly so, given roughly one in four agreed sales collapses before completion and the whole process usually runs 16 to 24 weeks.

If certainty is what you're actually buying, compare the friend route honestly against a genuine cash purchase. A real principal buyer uses its own funds and completes in 7 to 28 days, but offers land at roughly 75–85% of market value. Against that, a friend paying 90% with an eight-week timeline looks strong. Against a full open-market sale, less so.

If you do explore that route, check who you're dealing with. Look for membership of the National Association of Property Buyers (NAPB) and registration with The Property Ombudsman (TPO), which gives you free redress. Ask in writing whether the company is the buying principal or a lead broker passing you on for a fee. And be sceptical of anything advertised much above 82% of market value until it has survived a valuation — the opening figure that quietly drops days before exchange is this industry's oldest trick. Our comparison of house-buying companies, the cash house buyers guide and our industry data are the places to start.

Frequently asked questions

Do I need an estate agent to sell to a friend?

No. An agent's job is finding a buyer, agreeing a price and chasing the chain. You've done the first, you can do the second, and there's no chain. What you cannot skip is the conveyancing. Just check your existing agency agreement first if the house is already listed.

Can we use the same solicitor to save money?

Almost certainly not, and you shouldn't want to. Acting for both buyer and seller is a conflict of interest in the vast majority of cases and most firms will decline outright. The few hundred pounds you'd save buys away the only independent advice either of you gets.

How much below market value can I sell for?

There is no legal limit — you can sell your own property for £1 if you want to. The practical limits come from elsewhere: your friend's lender may cap the loan or refuse the case, the discount is a gift for inheritance tax, and if it isn't your main home HMRC can tax you on market value rather than the price you took. Below about 10% off, most of this is straightforward. Beyond 20–25%, get proper advice.

Does my mortgage lender need to know?

Your lender doesn't approve who you sell to, but your mortgage must be redeemed in full on completion and your conveyancer will obtain the redemption figure. Check for an early repayment charge — on a fixed deal that can run to thousands, and it's worth factoring into the price or the timing.

What if my friend pulls out?

Before exchange, either of you can walk away with no legal comeback, exactly as on the open market. You'll be out your conveyancer's abortive costs, typically £200–£400, and any search fees. This is why a written timeline and an early agreement in principle matter so much.

Can I sell to a friend and stay in the property as a tenant?

Technically yes, but tread very carefully. Sale-and-rent-back arrangements are FCA-regulated when done commercially, and a below-value sale where you keep living there raises gift-with-reservation issues for inheritance tax. Both of you need independent legal advice before going near this.

Is a private sale to a friend faster?

Usually, yes — eight to twelve weeks rather than sixteen to twenty-four, because there's no marketing period and no chain. It's not as fast as a genuine cash buyer, and it can be slower if your friend needs a concessionary-purchase mortgage, which adds an underwriting layer that ordinary applications don't have.

The short version

Selling to a friend is a good, straightforward way to save several thousand pounds and a lot of hassle. Read your agency agreement, get an independent valuation, use two conveyancers, fill the forms in honestly, and take advice before you agree any discount larger than about 10%. Do those five things and the transaction will almost certainly be smoother than an open-market sale.

Ready Steady Sell is run by founder Lisa Hayes, an independent UK home-selling expert with over a decade helping homeowners weigh up their options without pressure or hidden fees. If you're weighing a private sale against speed, start with our sell house fast hub and the property jargon explained guide — straight answers, no sales talk.