Hiscox says nearly one in five landlords who rent to friends or family have done so without a formal agreement, warning that informal lets can still leave owners exposed to repair bills, disputes and compliance failures.
The insurer surveyed 164 UK landlords and found that 64 percent had rented to someone they knew. Among that group, 18 percent said they had done so informally, while fewer than half said they still used a formal agreement.
For landlords, the warning lands just weeks after the Renters’ Rights Act became law. Informal lets may feel easier when helping out a relative or friend, but the legal duties around checks, deposits and property standards do not fall away because the tenant is known to the owner.
Formal steps still matter when the tenant is known to you
Hiscox said landlords who chose a formal arrangement most often used a written tenancy agreement, safety checks, deposit protection, an inventory and specialist cover. The insurer argued those basics help set expectations early and reduce the chance of arguments later.
Michael Dear, landlord insurance product lead at Hiscox, said most landlords who rent to someone they know still recognise the need for clear paperwork. He said agreements, safety checks and deposit protection help reduce misunderstandings and make responsibilities clearer for both sides.
The practical point for landlords is simple. A friend or family member can quickly become a source of financial loss if the arrangement is not documented properly. Hiscox included one case study from a landlord who said an informal short-term let to a friend ended with scuffed walls, broken freezer drawers, a dirty cooker and extra damage caused by an unreported bathroom leak.
Checks and evidence matter more under tighter rental rules
That matters against a wider backdrop of heavier scrutiny in the private rented sector. Landlord Knowledge recently reported on the next phase of the Renters’ Rights Act rollout, including the coming PRS database and ombudsman changes, while another recent survey found more landlords are tightening tenant checks after the RRA.
Hiscox’s own checklist says landlords should still use written agreements, complete safety checks, carry out right to rent checks where required, protect deposits, prepare an inventory and make sure insurance is suitable for the tenancy. The source material also points readers to its full casual renting risks research.
There is a limitation here. The survey sample is modest, and the findings are more useful as a warning about behaviour than as a market-wide measure. Even so, the story speaks to a real pressure point for smaller landlords, especially those handling ad hoc arrangements outside an agent-managed process.
This follows Landlord Knowledge’s report on landlords tightening tenant checks after the RRA, which suggested some owners are already becoming more cautious about risk, paperwork and tenant selection. The latest findings add another sign that informal habits are becoming harder to justify in a more tightly regulated market.
What this means for landlords
- If you’re helping out a friend or relative: treat it like any other tenancy and use a written agreement from day one.
- Watch for: missing inventories, unprotected deposits and gaps in insurance cover that could leave you carrying the cost of damage.
- Bottom line: a familiar tenant does not reduce a landlord’s legal or financial risk.
Editor’s view
Small landlords often take the biggest risks when they think they are doing someone a favour. In the current regulatory climate, informal renting looks less like flexibility and more like avoidable exposure.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 16 June 2026
Sources: Hiscox, casual renting risks research
Related reading: Survey shows landlords tightening tenant checks after RRA
