As the UK housing market continues to challenge tenants and property owners alike, many businesses are exploring ways to support their workforce including by providing housing. But can a company rent a house for an employee in the UK? The answer is yes, and the arrangement is known as a company let.
In this guide, we’ll explore how company lets work, their legal implications, tax considerations, and the pros and cons for landlords. If you’re a landlord in London, this could open new opportunities but it’s not without risk.
What is a Company Let?
A company let is a type of rental agreement where a business rents a residential property to house its employees. Unlike traditional assured shorthold tenancies (ASTs), company lets are governed by common law, not the Housing Act 1988.
Learn more about the basics of tenancy types in our guide on Property Management.
Key Legal Differences Between AST and Company Let
| Criteria | AST | Company Let |
|---|---|---|
| Governing Law | Housing Act 1988 | Common Law |
| Tenant Type | Individual | Business |
| Rent Regulation | Yes | No |
| Repossession Notice | Section 8 / Section 21 | Notice to Quit |
0% Commission - Rent paid on time every month - No rent voids - Property Maintenance.
Benefits & Drawbacks of Company Lets for Landlords
✅ Pros:
- Higher rent potential
- Longer tenancy agreements (often 3–10 years)
- Attracts professional tenants
❌ Cons:
- No direct control over individual tenants
- Risk of company insolvency
- Complex repossession process
To reduce risk, landlords often request that company directors act as personal guarantors. You can also opt for a guaranteed rent scheme to secure rental income without hassle.
Tax Implications for Companies Renting for Employees
Renting a home for an employee counts as a benefit-in-kind, which is taxable. Whether it’s taxable depends on if the accommodation is job-related, such as:
- Caretakers or live-in managers
- Agricultural workers
- Staff requiring housing for security reasons
Otherwise, National Insurance contributions and income tax will apply based on property value and rent paid.
Legal Responsibilities of the Company
Companies must:
- Sign a formal tenancy agreement
- Maintain the property and ensure health & safety standards
- Ensure non-discriminatory selection under the Equality Act 2010
Tips for Companies Renting for Employees
- Conduct a cost/benefit analysis vs. salary uplift or allowance
- Communicate obligations clearly with employees
- Ensure legal and tax compliance with professional advice
Alternatives to Company Letting
1. Employee Allowance:
Provide a rental allowance and let employees choose their home.
2. Company-Owned Property:
Buy a property for long-term use. Consider our Property Investment services if you’re looking to purchase housing assets.
3. Guaranteed Rent Scheme:
Partner with KP Groups through our Guaranteed Rent in Croydon or Thornton Heath services. You’ll receive fixed income, tenant management, and property maintenance with zero hassle.
Final Thoughts: Should You Rent to a Company?
A company let can be a valuable strategy, but only if landlords understand the legal and financial implications. If you’re unsure, our experts at KP Groups can help guide your decision.
Ready to maximize your rental yield with peace of mind? Request a free rental valuation and discover how our guaranteed rent scheme could work for you.
