The risks of renting casually to friends and family

Renting to someone you know may feel straightforward, but even familiar tenants could benefit from clear agreements. Rachael first experienced this in 2016, when a colleague expressed interest in her property as it came up for renewal. 

Rachael says: ‘I had rented to strangers before, but when the property came up for renewal, a friend from work asked if she and her husband could view it, as they were looking to rent nearer to their work. When they said they liked it, I agreed to rent it to them.’ 

She explains that despite knowing the tenants personally, they approached the arrangement professionally from the start: 

‘As they were in the process of looking for a rental, we followed all the standard procedures, including credit checks, drawing up a lease, and clearly outlining their responsibilities. They had also rented previously, so knew what was expected in terms of dealing with landlords and which responsibilities fell to them versus the landlord.’ 

To ensure clarity, Rachael formalised the agreement with written terms and defined responsibilities. 

She explains: ‘We downloaded a six-month Assured Shorthold Tenancy (AST) and added a clause to have an end-of-tenancy clean. The agreement clearly outlined which bills the tenant was responsible for and when rent reviews would take place. We also paid for credit checks and referrals.’ 

The tenancy lasted 18 months. Rachael believes that having clear processes in place played a key role in maintaining both the friendship and a smooth rental experience.

In contrast, Rachael’s second experience in 2023 took a more informal approach. The arrangement was intended as a short-term solution while she prepared the property for sale. 

Rachael says: ‘I was selling my home, so I didn’t want a full tenancy in place in case it sold quickly. My friend needed to move out of her parents’ home, so I offered her the chance to live in my fully furnished property at a reduced rent to prevent it from sitting empty while on the market – with the understanding that she would need to move out a week or two before the sale completed.’ 

Because the agreement was based on mutual convenience, no formal documentation was put in place. 

Rachael continues: ‘As it was such a temporary arrangement and we were both doing each other a favour, she contributed a small amount towards the mortgage and helped keep the property from sitting empty. In return, she was able to move out of her parents’ home and have her own space at a very reasonable rate.’ 

Initially, Rachael believed the arrangement was working well. It wasn’t until after the tenant moved out that she discovered significant damage to the property. 

Rachael recounts: ‘I had cleaned everything thoroughly and repainted the propertyfor the sale photos, so it was in excellent condition and ready for the new owners. However, when she moved out, I discovered scuff marks on the freshly painted walls, general dirt, broken plastic freezer drawers, and a filthy cooker with unclean oven trays. The most frustrating part was that she hadn’t told me about a leak in the bathroom, which had damaged the bath panel and left water marks on the tiles and taps. An attempted DIY fix had only caused further damage, as it wasn’t done professionally. 

‘I understood at first, thinking that she was young and maybe didn’t know or was scared to tell me. But as I came across more mess and dirt, I realised there had been a real lack of care and respect for the property.’ 

The experience left her not only facing unexpected repair costs, but also feeling personally disappointed: 

‘I was upset more than anything else. I’d owned the property from new for 10 years, lived in it for five, and rented it out for four – and every previous tenant had taken good care of it, so it was always well maintained and ready to hand over. After just a couple of months, it looked completely different. It was already emotional putting it up for sale; I’d worked hard to buy it and felt proud of how well I’d looked after it. I also expected her to have the same level of cleanliness and care that I had. 

‘A formal document would have made things much easier, I wish I had treated it as a short-term let and put everything in place even though it was super temporary. It may have made us both think about responsibilities and given some ownership about the state of the property to my then friend.’

Looking back on her experience, Rachael shares three key lessons she learned about renting to someone you know: 

1. ‘Be honest with yourself – do you really know that person? Have you seen how they live in their own home, and are you comfortable with their standards of tidiness and cleanliness?’ 
2. ‘No matter who they are, always put a formal tenancy agreement in place and take a deposit. This sets clear expectations from the outset and gives you something concrete to refer back to if issues arise. It’s much easier to say, “The agreement states…” than to rely on assumptions about what was discussed when they moved in. Even a small deposit can encourage greater responsibility and accountability.’ 
3. ‘Be extremely clear about your expectations and include them in writing. If you expect to be informed immediately when something breaks, and to manage repairs yourself, state that explicitly. If you require a professional end-of-tenancy clean, put it in the agreement and ask for receipts. Take meter readings at the start and end of the tenancy and make it clear that any outstanding payments will be deducted from the deposit.’ 

For more information on maintaining positive relationships with tenants, explore our tenancy retention strategies guide.

We surveyed 1,541 individuals in the UK, including landlords, tenants, and those thinking about letting property, to find out their views on renting to friends or family and the challenges they’ve encountered.

Landlord perspectives

Among the 164 landlords surveyed, nearly half (46%) said they had rented to friends or family with a formal agreement in place, while 18% had done so informally. For those who opted for a formal arrangement, the most common provisions included: 

• Written tenancy agreement (69%) 
• Safety checks e.g. gas/electrical (54%) 
• Deposit protection (46%) 
• Inventory or condition report (41%) 
• Specialist landlord insurance (40%)

These findings suggest that while many landlords take steps to formalise arrangements with friends or family, the level of protection in place can vary. A written tenancy agreement is by far the most common safeguard, which could suggest that most landlords want expectations and responsibilities clearly set out from the start – even when renting to someone they know personally. Just over half also carry out safety checks, which may reflect an awareness of legal requirements and property standards.

That said, fewer landlords put financial and dispute-related protections in place, such as deposit schemes, inventories or specialist insurance. This could suggest that some may rely more heavily on trust when renting to friends or relatives, potentially taking a more relaxed approach to managing risk.

Broader public attitudes

We asked all of our survey respondents whether they would rent a property to friends or family.

One in five (20%) said they definitely would, while over half (54%) said it would depend on the circumstances. Meanwhile, 26% said they would not consider it at all.

Among those hesitant or unsure, the main concerns were: 

• Fear of damaging the personal relationship if issues arise (57%) 
• Difficulty enforcing rent payments or tenancy rules (45%) 
• Awkwardness around repairs, maintenance or complaints (36%) 
• Concerns about not being taken seriously as a landlord (25%) 
• Legal or insurance complications (4%)

Overall, the biggest hesitation seems to be more about people than paperwork. The biggest concern by far is the potential strain on relationships, with over half worried that disagreements over money, damage, or notice periods could cause lasting tension.

Practical boundaries are another sticking point. Nearly half are concerned about chasing late rent or enforcing rules, suggesting many expect it would be harder to draw the line when the tenant is someone they know. Over a third also think everyday issues like organising repairs or responding to complaints could feel awkward in a personal relationship.

A quarter worry they wouldn’t be taken seriously as a landlord, which could indicate concerns about authority and blurred roles.

Very few cite legal or insurance complications as their main concern.

Tenant perspectives

Among the 26% (130) of surveyed tenants who had rented from someone they know: 

• 25% said it improved the relationship 
• 20% said it strained the relationship 
• 2% said it severely damaged it 

45% had a formal agreement in place, while 42% rented informally. 

Of the 74% (370 respondents) who had never rented from someone they knew, 62% said they would consider it, while 38% said they would not consider it at all.

For those unwilling to do so, the main reasons were: 

• Fear of damaging the personal relationship (67%) 
• Feeling awkward to raise complaints (66%) 
• Lack of formal agreement or documentation (27%) 
• Unclear responsibilities or rules (22%) 
• Risk of late payments or financial strain on the friend (13%) 
• Uncertainty about moving out if needed (12%)

The main worries centre around damaging the relationship or feeling awkward about raising issues. Practical and procedural issues, such as not having a formal agreement or unclear rules are mentioned less frequently. Financial concerns and questions about moving out rank lower, suggesting that for most, the emotional and relational dynamics are the main factors influencing their decision.

Following a clear process from the start can help protect your home, set expectations, and prevent disputes. We’ve compiled a checklist of things to consider when setting up a rental agreement: 

1. Use a written tenancy agreement

   Even when renting to someone you trust, having a formal tenancy agreement can help prevent misunderstandings. A written contract clearly sets out responsibilities, rent terms, and rules, protecting both parties.

2. Conduct safety checks

   Landlords are typically required to complete certain safety checks before a tenancy begins¹ (external link), and should stay up to date with wider regulatory changes, including the Renters’ Rights Act.

3. Right to rent checks

   Renting to a friend or family member does not remove the requirement for landlords to carry out right-to-rent checks.² (external link) Some landlords also complete referencing to ensure the necessary checks and documentation are in place.

4. Protect the deposit

   If your tenancy is an AST, the deposit must be placed in a government-approved scheme – even for friends and family. This can help protect both you and the tenant and ensures compliance with the law.³ (external link)

5. Carry out an inventory

   Documenting the property’s condition before the tenant moves is important. A detailed inventory, including photos, can reduce disputes over damage or missing items at the end of the tenancy.

6. Check your insurance

   Check your landlord insurance adequately covers both your property and rental activity. Some insurers may outline additional conditions during a tenancy.

Michael Dear, Landlord insurance product lead at Hiscox, says: 

‘Renting to friends or family may feel convenient, but it can quickly lead to misunderstandings, property damage, or disputes if arrangements aren’t formalised. Even with people you trust, having a proper tenancy agreement in place is essential. 

‘Clear contracts set expectations around rent, responsibilities, and property care, providing landlords with a concrete reference if issues arise. Combined with safety checks and documentation, this approach can help protect both your property and your personal relationships, ensuring the tenancy runs as smoothly as possible.’

We surveyed 1,541 UK individuals in January 2026 to explore their attitudes surrounding casual renting, via survey platform OnePulse. 

Hiscox is a specialist insurer offering comprehensive cover for landlords. For more information, explore our guides on permitted occupiers, preparing for a new tenant. You can also learn more about our landlord insurance offering.