What is a sale and leaseback?
In a sale and leaseback, an owner sells a property and immediately leases it back from the buyer, releasing capital while keeping use of the building. It is common for commercial property. For homeowners, sale and rent back is regulated by the Financial Conduct Authority because of past mis-selling.
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Sale and leaseback at a glance
| Point | Position |
|---|---|
| Seller gets | Capital released, often in one payment |
| Seller keeps | Use of the property as tenant |
| Buyer gets | An investment with a known tenant and rent |
| Commercial use | Common for shops, offices and industrial units |
| Homeowners | Regulated sale and rent back; FCA authorised firms only |
| Main risk | Rent rises and limited security at lease end |
How it works
The owner agrees a sale price and, at the same time, a lease setting the rent, length and repair obligations. Buyers value the deal on the rent and the strength of the tenant, much like any investment purchase. A long lease at a fair rent supports a good price; a short lease at a high rent can look attractive on paper but may not last.
How landlords meet it
Portfolio landlords most often meet leasebacks in three ways: owning mixed-use property where a business sells and leases back its premises; operators offering to buy and lease back HMOs or serviced accommodation; and councils or housing associations taking long leases on homes. Each needs its own legal and tax advice.
Sale and rent back for homeowners
Selling your own home to a firm and renting it back has been FCA regulated since 2009. Firms must be authorised, give a minimum fixed term and treat sellers fairly. It is usually a last resort for people facing repossession, and the price is normally well below market value.
Points to check
- Rent review terms and how the rent will change.
- Who repairs what, especially roofs and structure.
- What happens at the end of the lease, including any option to buy back.
- The tax effect: a sale can trigger CGT, and an artificially low price or high rent can be challenged.
Official Sources and Further Reading
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
In a sale and leaseback, an owner sells a property and immediately leases it back from the buyer, releasing capital while keeping use of the building. It is common for commercial property. For homeowners, sale and rent back is regulated by the Financial Conduct Authority because of past mis-selling.
Some investors offer this, but the rent you pay must be covered by what tenants pay you, so the margin is often thin. Compare it with a clean sale.
No. Ownership transfers to the buyer. You become their tenant and lose any future growth in value.
Search the FCA register to confirm the firm is authorised for sale and rent back.
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