Nearly one in five landlords (18%) admit to renting to someone they know without a formal agreement, risking disputes and financial losses.

Specialist insurer Hiscox’s poll found almost two-thirds (64%) have rented to a friend or family member but only 46% used a formal agreement. For those who did so, the most common provisions included a written tenancy agreement (69%), safety checks such as gas/electrical (54%), deposit protection (46%), an inventory or condition report (41%) and specialist landlord insurance (40%).

The fact that fewer landlords put financial and dispute-related protections in place suggests that some are relying more heavily on trust when renting to friends or relatives. However, these arrangements still need clear agreements and boundaries.

Prevent

Hiscox suggests landlords should use a written tenancy agreement to help prevent misunderstandings and conduct safety checks. They also need to do Right to Rent checks, as renting to a friend or family member doesn’t remove this requirement, while protecting the deposit, doing an inventory check and having insurance are also key.

Michael Dear, landlord insurance product lead at Hiscox, says informal renting may feel convenient, but can quickly lead to misunderstandings, property damage, or disputes if arrangements aren’t formalised.

“Clear contracts set expectations around rent, responsibilities, and property care, providing landlords with a concrete reference if issues arise,” adds Dear. “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.”

Among the 26% of surveyed tenants who had rented from someone they know, 25% said it improved the relationship while 20% said it strained the relationship. Hiscox found 45% had a formal agreement in place, while 42% rented informally.

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