Letting a home to someone you know can make the initial conversation easier, but it can also leave important expectations unstated. Before a relative or friend moves in, establish the legal and practical nature of the arrangement rather than assuming the relationship answers every question.
This guide focuses on a separate property in England. Sharing your own home, allowing a rent-free stay and creating a tenancy are different situations and may require different advice. It is not safe to determine the legal position from the words “family arrangement” alone.
Check the formal requirements
GOV.UK says that, where an assured periodic tenancy is created after 1 May 2026, specified written information about its key terms must be provided. Older arrangements have their own information requirements. Obtain an appropriate agreement and current advice for the actual circumstances instead of relying on an outdated AST template.
The government’s landlord guidance also says a mortgage lender’s permission is needed before renting out a mortgaged property. Check the proposed occupier and use with the lender and insurer, rather than assuming a general consent covers every family letting.
Agree the practical expectations
Discuss the rent, payment date, bills, reporting of repairs and access arrangements before the move. Put the outcome in clear language that both people can refer to. A written record should help avoid misunderstandings, not suggest that either person can contract out of legal protections.
Decide who will deal with problems. If you prefer a managing agent to keep housing matters separate from family conversations, establish the agent’s role and authority. Avoid informal promises that contradict the written arrangement.
Take advice on a discounted rent
HMRC’s property-income manual explains that a below-market letting can limit expense deductions to the rent received. A generous rent concession therefore needs a tax discussion rather than an assumption that the property will be treated exactly like a commercial letting. Rent-free use has a different position again.
Prepare the figures and facts for the adviser: ownership, proposed rent, expected costs and the intended arrangement. Do not rely on old online references to stamp-duty surcharges or allowances when making a current decision.
Keep safety and communication on the agenda
Arrange the required property checks and establish how maintenance will be handled. A personal relationship should make concerns easier to raise, not discourage the occupier from reporting a problem.
This replaces an archive article containing outdated tax figures and broad insurance claims. The aim is a clear, properly checked arrangement that protects the relationship as well as the home.
Sources: GOV.UK landlord responsibilities and written-tenancy-information guidance; HMRC PIM2130, checked 4 November 2026.