Half of landlords are happy to allow subletting with the right safeguards in place, even though more than two-thirds have caught tenants secretly subletting their properties, according to new research from Direct Line business insurance.

Those safeguards include clear terms and insurance coverage, full vetting of subtenants, and ensuring subtenants meet the same standards as original tenants through references and credit checks. Others would allow short-term sublets during specific periods only, such as summer holidays or student breaks.

Jonny McHugh, Head of Landlord at the insurance giant, says the findings show landlords take a pragmatic approach, prioritising knowing who occupies their properties over blanket bans on subletting.

The security of knowing who’s living in their property and that the right checks are in place are important.”

“Our research shows that not all landlords are opposed to subletting, but the security of knowing who’s living in their property and that the right checks are in place are important.”

The most common way landlords discover secret sublets is neighbours reporting unusual activity or frequent new faces (31%), followed by routine inspections (28%) and complaints about noise or damage (24%).

One in five landlords spotted their property listed on rental websites such as SpareRoom, Airbnb or Gumtree.

Routine checks

Nearly half of landlords conduct routine property checks every six months, while three-quarters inspect at least once a year. Of those who found unauthorised subletting, almost two-thirds said it had happened within the last 12 months.

When discovering a secret sublet, most landlords issued formal warnings (34%) or reported the situation to their letting agent (30%). Over a quarter allowed the sublet to continue under new terms with written permission (26%).

McHugh concludes: “Being upfront with tenants about what is allowed, and putting clear agreements in writing, can help prevent misunderstandings and protect everyone involved.”

There is, though, still resistance from some landlords, with a fifth believing subletting fundamentally undermines their control over the property and 8% citing bad experiences.