There are currently no regulations specifically banning the use of polystyrene ceiling tiles in existing rented property.

However, it is unlikely that local authority fire officers and environmental health officers would approve their use in a House in Multiple Occupation (HMO)

Also, under current building regulations these would not be legal in new properties as walls and ceilings are now required to have a class ZERO rated surface, banning the use of polystyrene, gloss paint, vinyl and even some types of flocked wallpapers.

Early types of these tiles where a real fire hazard. When they burn they spread the flames quickly, give off toxic fumes and drip blobs of hot molten plastic, which can potentially cause terrible skin burns.

Later types have fire retardant chemical additives, but it is still advisable to remove them to make sure you as landlord meet the latest safety standards.

Landlords have a duty of care for the safety of their tenants. But, not only do you want to avoid injury to occupants, you will want to minimise the risk of extensive fire damage to your property should a fire accident occur.

See also:

http://uk.youtube.com/watch?v=xT7chxB45Ms