Is rent to rent safe for landlords?

Rent to rent, also sold as guaranteed rent, is a company let: you grant a tenancy directly to a company, and it runs the property and keeps whatever it earns above the fixed rent it pays you. It is safe where the consents are in place and the operator can stand behind the contract. Since 1 May 2026 a rent repayment order can also reach you as the superior landlord.

An interest to declare before going further. Straight Up Stays offers this model. For selected properties we rent the property under a separate company let agreement and pay an agreed fixed rent, and management is our standard route. This page is about whether the model is safe in general, including the parts that count against it and against us.

If an operator has approached you, the pitch will have led with rent paid during voids and a calendar you never touch. Two things it will not have covered: the guarantee is a promise from a company whose solvency is the actual risk, and the law around the model changed on 1 May 2026.

What rent to rent actually is

You stay the owner. You grant a tenancy to the operator company, and that company is your tenant. The people staying in the property are its occupiers, and you have no contractual relationship with them.

It is worth being precise here, because the word subletting gets attached to this model and it is the wrong word. A company let is a direct grant from you to a named company on an agreement you sign. You are not letting to an individual who then quietly puts someone else in behind you. You know exactly who your tenant is, the permitted use is written into the agreement, and what the company may do with the property is defined by that document. That is the control point in the whole arrangement, and it is the thing to read hardest.

Because the tenant is a company, the arrangement sits outside an assured tenancy: section 1(1) of the Housing Act 1988 requires the tenant to be an individual occupying the property as their only or principal home. What a mid-term let does to your legal position works through that test in detail.

The economics are worth saying plainly, because operators rarely do. The operator earns the difference between what the property produces and what it costs to run, including the rent it owes you. If the property does well, the operator keeps the upside. If it does badly, the operator still owes you the rent. That spread is the payment for carrying the risk, and there is nothing improper about it. It is simply what you are selling when you take a fixed rent.

Where the word “guaranteed” is doing a lot of work

The rent is guaranteed by contract, subject to the terms of that contract. Both halves of that sentence matter.

Three things the word does not carry on its own:

• It is not unconditional. The agreement will contain obligations on you as well as the operator, along with break provisions and conditions. What the rent survives depends on what the document says.
• It is not underwritten by anyone else. No insurer or scheme stands behind it unless the agreement says so. A fixed rent is worth exactly what the company promising it is worth.
• It is not a guarantee attached to a management service. Management and a company let are different relationships with different risk, and any offer that blurs them is worth a second look.

So the first safety question is about the counterparty, and it is not a legal question at all. Who exactly is the contracting entity, how long has it traded, what does it own, and what happens if it stops paying. Ask for the company number and look it up.

The change on 1 May 2026 that owners have not caught up with

A rent repayment order requires a landlord to repay rent where certain housing offences have been committed, most commonly operating a licensable property without a licence. A tenant or the local council can apply.

For years the position from Rakusen v Jepsen was that an order could only be made against the immediate landlord. In a rent to rent chain that meant the operator, and the owner one step up sat outside the reach of the order. That was one of the quiet attractions of letting through an intermediary.

The Renters’ Rights Act 2025 removed it. Section 103 amended the Housing and Planning Act 2016 so that the tribunal may make an order where the offence was committed by:

a landlord under a tenancy of housing in England, or any superior landlord in relation to such a tenancy

The change applies to offences committed on or after 1 May 2026. In the same reform the maximum went up: an order can now cover the rent for a period of up to two years, less any relevant universal credit paid in respect of rent.

Read the wording carefully, because it is narrower than some of the commentary suggests. The order still follows the person who committed the offence. What has gone is the structural protection: sitting one rung up the chain no longer puts you out of reach when the offence is yours. It also matters what shape the operation below you takes. The rent repayment regime runs on tenancies, so the exposure is sharpest where the operator lets rooms or units on tenancies, which is the model behind most unlicensed-HMO cases. A short-stay operation where guests occupy under licences sits differently. Either way the intermediary has stopped being a shield, so establish which shape your operator runs and get the licensing position confirmed in writing before anything starts.

The consents that stay yours, whoever is operating

A company let does not move these off your desk. This is our own position as much as general advice: we will flag the obvious questions, and confirming permissions remains the owner’s responsibility, with professional advice where it is needed.

• Your mortgage. Consent to let is usually written with a tenancy to an individual in mind, and a company let is a different grant. Ask the specific question: does the product permit a tenancy to a company, on these terms, for this use. Some prohibit corporate lets outright, and others catch any parting with possession however the arrangement is labelled.
• Your lease and freeholder. Leases on flats commonly restrict who you may let to and on what terms, frequently catch parting with possession, and some set a minimum letting length that a short-stay operation would breach. Read the alienation clause and get written consent where the lease calls for it.
• Your insurance. The schedule needs to record that the property is let to a company on a company let, and what that company will be doing with it. A policy written for an ordinary tenancy to an individual is priced for a different risk.
• Licensing. Selective, additional and HMO licensing vary by council and by how the property will be used. Establish who applies, who holds the licence, and who carries the duty.

If you cannot get these consents, the answer is no, and it is no from every operator, this one included. An operator willing to proceed without them is telling you something about how it handles everything else.

What you are actually buying, next to management

Management is the standard route and the one most owners should look at first. A company let is the selective alternative, and the difference is easiest to see side by side.

The trade is straightforward once it is laid out. Under management you keep the booking upside after agreed fees and costs, you get full booking and payout reporting, and personal use can usually be accommodated. Under a company let you take a fixed contractual rent, the operator keeps the operating result in both directions, reporting narrows to the rent and whatever the agreement requires, and personal use is normally unavailable during the term unless it is expressly written in.

Which is better depends on what you want from the property. Whether paying for management is worth it works through that decision without a fixed rent in the picture.

What a safe arrangement looks like

This is the list we work through before a company let starts, and it is the list to hold any operator to, including us.

• The contracting entity, named and checked. Company number, trading history, and who signs.
• Written consent from your lender and your freeholder, in hand before the agreement starts. A promise to sort it out alongside is not the same thing.
• Your insurer told in writing, with the use recorded on the schedule.
• The licensing position established, including who applies and who holds the licence.
• What happens on late payment or default, and what security exists.
• Break provisions on both sides, so neither party is trapped by a change of circumstances.
• Condition, contents and handback written down, with a dated inventory and photographs at the start.
• Access for inspection, at a sensible frequency, written into the agreement.

Every one of those belongs in the agreement itself, and the agreement should have proper legal review before anyone signs it. We do not publish our terms until they exist in a reviewed document, and you should be wary of anyone who quotes you terms before you have seen the paperwork.

When rent to rent is the wrong answer

It is the wrong answer more often than the operator pages suggest.

• You want to keep using the property. Personal use is normally unavailable during the term. If a fortnight each summer matters to you, this model will grate for years.
• Your market has real upside. A fixed rent is a floor and a ceiling at the same time. In a strong market you are selling the good years to insure the bad ones.
• The gap is thin. Compare the fixed rent against what the property would realistically net you under management after costs. If the difference is small, you are paying a lot of upside for the certainty, and the sum is worth doing properly before you sign.
• You could not absorb a default. The rent is a contractual promise. If a few months without it would put you in difficulty, the certainty you are buying is thinner than it looks.
• You cannot get the consents. This one is not a preference. Without them the arrangement is a problem waiting for a trigger.

Where those apply, management or self-management is the better route, and an operator worth dealing with will say so.

If you want to know which model fits your property, if either, get a free Airbnb valuation. It tells you what the property would realistically earn under management with the assumptions shown, which is the number any fixed rent should be measured against.

Frequently asked questions

Is rent to rent legal in the UK?

Yes. Granting a tenancy to a company is an ordinary commercial arrangement and lawful in itself. That is what a company let is, and the company becomes your tenant. What causes trouble is doing it without the permissions: granting a tenancy your mortgage or your lease does not allow, operating without a licence the property needed, or insuring it as something it is not. The model is legal; particular arrangements go wrong on consents and compliance.

Do I need my mortgage lender’s permission for a company let?

Assume yes, and get it in writing. Consent to let is usually granted with a tenancy to an individual in mind, and a company let is a different grant. Ask the specific question: does this product permit letting to a company, on a company let, for the use intended. Some products prohibit corporate lets outright. Name the arrangement when you ask, and keep the answer. The wider picture, including which regulatory category your mortgage sits in, sits alongside this.

What happens if the rent to rent company stops paying or goes bust?

You are a creditor with a contractual claim, and how far that gets you depends on the agreement and on what the company has. There is no scheme standing behind the rent unless the agreement says so. Practically, you would be looking at the arrears, the occupiers still in the property, and the condition it comes back in. That is the risk the fixed rent is paying you to take, so check the counterparty before you check the number.

Can I be fined for something the operator did?

A rent repayment order follows the person who committed the offence. What changed on 1 May 2026 is that being one step up the chain no longer puts a superior landlord beyond reach where the offence is theirs, and the maximum is now up to two years of rent. Licensing duties can attach to more than one person in a chain, so get the licensing position confirmed in writing before the agreement starts and take advice on your own position.

Sources

• legislation.gov.uk: Renters’ Rights Act 2025, section 103 (rent repayment orders: liability of landlords and superior landlords; amends the Housing and Planning Act 2016 section 40, in force 1 May 2026; checked 2026-08-07)
• legislation.gov.uk: Housing and Planning Act 2016, section 44 (maximum amount, a period not exceeding two years, less relevant universal credit; revised version shown 5 August 2026; checked 2026-08-07)
• legislation.gov.uk: Housing Act 1988, section 1 (the tenant must be an individual for an assured tenancy; checked 2026-08-07)