Glossary · UK

What is Rent-to-Rent?

An arrangement where someone rents a property from a landlord and then sub-lets it to tenants, keeping the margin between the two rents.

Full Definition

Rent-to-rent is a property strategy where an operator takes a property on a lease or management agreement from the owner, pays the landlord a fixed rent, and then lets it out to occupiers - often as a house in multiple occupation or short-term let - aiming to profit from the difference. The operator typically takes on day-to-day management and the risk of voids, in exchange for higher achievable rents from multiple tenants. In the UK this needs the landlord's clear written consent, the right to sub-let, mortgage-lender and insurer agreement, and compliance with licensing rules (for example HMO licensing) and safety regulations. The operator's profit is trading or rental income subject to Income Tax and, if run through a company, Corporation Tax (19% on profits up to GBP 50,000 for 2026/27). Rent-to-rent matters because it lets people build a lettings business without buying property, but it carries legal, contractual and reputational risks if consents and licences are missing.