What Is Subletting and Is It Legal in East London?

Subletting in East London is fairly common in areas where there is high demand for room renting, such as Ilford and Barking.

As a landlord, in some circumstances it might make sense to authorise subletting in your property, but it is important to understand the risks, particularly now there have been changes to tenants’ rights under the Renters’ Rights Act.

If you are ever asked about subletting your property and wondering ‘what is subletting?’, and then further wondering ‘is subletting legal?’ and ‘do I need a sublet agreement?’ then you will want to read this article to find out the answer to all these questions.

What Is Subletting?

In a nutshell, subletting is when a tenant rents a property from a landlord and then rents out a room in the property (known as a partial sublet), or the entire property itself, to someone else, known as a subtenant. A subtenant is different to a lodger, as a lodger lives with the landlord and does not have tenants’ rights.

In other words, the person subletting doesn’t have any relationship with the landlord (because the latter often doesn’t know of their existence). Yet, they are paying rent (but without a security deposit) and without being named on the original lease.

As far as the landlord is concerned, no one else should live in the property without permission. Landlords and agents mainly frown upon subletting unless they have permitted the tenant to sublet.

Is Subletting Illegal UK?

Whether subletting is legal depends on what is written in the tenancy agreement and whether the landlord has given consent for subletting.

Following the introduction of the Renters’ Rights Act 2025, all tenancies are now periodic from day one and landlords are advised to ensure that the tenancy agreement wording is clear around subletting rules and how to request permission.

Subletting is illegal if it is prohibited on the lease. Most lease agreements contain a clause stating that subletting it is not permitted. Subletting is also unlawful if there isn’t a clause in the lease, but the landlord is asked, refuses, and the tenant still goes ahead and gets in a subtenant. In this instance, the tenant can be charged with fraud.

There are different rules for shared ownership properties, with many shared ownership leases prohibiting subletting.

Penalties For Sub Renting A House Or Apartment Illegally

A tenant who has made money from sub-letting, knowing that it states in their original lease that it isn’t permissible, can be prosecuted in either the magistrates or crown court. The former carries a maximum sentence of six months and the latter two years. Alternatives to jail are fines. Or, the offender could be both jailed and fined.

If found guilty, the offender – under subletting laws in the UK – may also have to pay the landlord every penny they earned while subletting. This is if the court makes an Unlawful Profit Order.

The landlord could also risk financial penalties or costs if their mortgage or insurance is invalidated by undisclosed subletting.

Subletting Versus Lodging

Lodgers and subtenants are different; a lodger lives in the property with the landlord and this does not constitute subletting. There is a different set of rules for lodger arrangements.

If a family member or friend stays with your tenant for a few weeks or even a month or two and is not paying rent, this cannot be regarded as subletting. In this case, your tenant is merely having a guest staying. It would be subletting if the individual moved in, had the exclusive use of a room and paid rent to your tenant (but without a security deposit to yourself).

The tenant is also subletting if they move out for a few months and let their room out to a new tenant who is a friend of theirs and ends up paying rent (even if they give that rent to you).

Can A Landlord Say No To Subletting?

Yes, a landlord can refuse a request from a tenant to sublet the property, unless the tenancy agreement states that they have consent to sublet. The landlord does not require a good reason for refusing to approve a subletting request.

However, it may be worth considering any request, especially now that tenants can provide just two months’ notice for terminating the tenancy. If you have a good tenant who explains the reason for subletting, such as to help afford the rent and bills, authorising subletting can be a better option than facing the potential of missed rent payments.

Landlords can carry out tenant screening for the subtenant to minimise risk and perform an inspection once the subtenant has moved in to check that there are no concerns.

Why Do Tenants Sublet?

Most tenants will sublet to make money because they find it too difficult to pay the rent independently. This can be because their financial circumstances alter after they move in, such as a partner moving out or taking lower-paid employment.

Rents in East London are generally higher than many parts of the UK and if there is adequate room in the property, subletting will make renting more affordable.

Subletting can also happen when a group of professionals share a flat, and one tenant decides to move out before the tenancy agreement ends. The original tenants may choose to sublet to cover the property’s costs.

Want to become a more informed landlord? Read up on how to rent out a property and a landlord’s right to enter a property.

What Rights Does A Subtenant Have?

A subtenant has the same rights as a tenant, i.e. exclusive rights to their room. Landlords must seek their permission if they want access to it.

However, if a subtenant is there without the landlord’s knowledge, this wouldn’t apply (for obvious reasons). In this case, the original tenant would be ‘the landlord’, and they would be responsible for the subtenant.

It is important to have written confirmation of who is responsible for landlord obligations. The tenant who sublets with consent will become an ‘intermediate landlord’ and will become responsible for carrying out a Right to Rent check and providing documents such as Gas Safety Certificate, EPC, EICR and deposit registration to the subtenant.

Alternatively, the superior landlord may accept rent from the subtenant, with a new tenancy agreement and they will be responsible for carrying out all landlord duties related to the new tenant.

Why Do Landlords Refuse To Allow Subletting?

One of the main reasons private landlords refuse to allow a tenant to sublet is because it may be against the conditions of their mortgage. In this case, the lender can withdraw the mortgage from the landlord.

In most cases, subletting will also make buy to let insurance null and void. Or it may increase the cost of that insurance policy.

There is also the possibility that the subtenant will cause damage to the property or miss rent, which can cause legal complications as the original tenant is still liable.

Another issue is that your property may become an unlicensed House of Multiple Occupancy (HMO) when sublet to sub-tenants. A property is considered an HMO if three or more people rent a property and share facilities – but they’re from separate families. Special rules govern HMOs, and they require specific licensing from the council. They also need different safety regulations. If you’re found to be illegally subletting with an unlicensed HMO, the court can charge you an unlimited fine as a penalty.

How Can A Landlord Stop Tenants’ Subletting?

An explicit clause in the tenancy agreement banning a sublease agreement should be enough to deter your current tenants from subletting to a new tenant.

Under the Renters’ Rights Act 2025, landlords can no longer use a Section 21 eviction to resolve subletting issues and must use Section 8 grounds for evictions instead. Therefore, having clear and enforceable tenancy clauses to prohibit subletting is now more important than ever and landlords should not rely on implied prohibition.

If this fails, and you suspect a tenant is sub-letting, then carrying out regular property inspections of your buy-to-let apartment or house should help. You will have to give notice of the inspections, of course, but the hassle of moving the subtenant’s belongings every time will likely prove too stressful for all concerned.

Befriending the neighbours isn’t a bad idea either. They can monitor who enters and leaves your property.

How To Prove Illegal Subletting

These are the steps to follow if you suspect that your tenant is illegally subletting:

1. Check the tenancy agreement to see what is written about subletting rules.
2. Conduct an inspection to check for yourself whether there is any evidence that an unauthorised person is living in the property. Make sure that you document observations from the inspection.
3. Gather evidence such as information provided by neighbours about people regularly entering the property.
4. Speak to the tenant to address your concerns if you have found any evidence.
5. Take legal advice if needed.

What Are the Legal and Financial Risks of Subletting for Landlords?

If you agree that your tenant can sublet, you must produce a sub-letting agreement. However, it could still invalidate several of your property’s policies, including any insurance and the mortgage itself. For this reason, it’s always a good idea to check your policies before allowing a tenant to carry out a sublease agreement.

Then there is the issue of the original tenant moving out before the subtenant. It’s often more difficult getting rid of a subtenant when you want the property back – mainly because they won’t have a regular tenancy agreement. Getting an eviction notice in such circumstances is more challenging and can end up in a long, drawn-out, and costly court battle. There is also the question of the security deposit – unlike a regular tenant, subtenants won’t necessarily have provided a security deposit to the landlord.

Short-term subletting such as tenants placing property on Airbnb listings has become a growing problem in London. There are local laws including the 90-day short-let cap in Greater London (under the Deregulation Act 2015) that could cause legal issues.

How Can Landlords Allow Subletting Safely?

Sometimes it can be in a landlord’s best interests to sublet- especially if your tenant is struggling with the rent and the person moving in (such as a partner or friend) will make up any shortfall.

If you go down this route, you should notify your mortgage lender and insurer before agreeing to subletting to check that it is allowed under their terms and will not invalidate insurance cover.

To protect yourself legally, add a clause to the existing lease, agreeing that you permit to subletting in this instance.

It’s a good idea to strike up a good, friendly relationship with your tenants so they can let you know if they do run into financial difficulties. If you work out a payment plan together, they may not be tempted to sublet.

When your tenant lets you know the name of the new tenant they plan on subletting to, continue carrying out tenant reference checks to ensure they can afford the rent, etc. The written request from the tenant should include details such as who the tenant is, how long they will be subletting and the agreed rent payment. This will help to protect all parties.

Again, regular inspections of the property should put any of your concerns to rest once and for all.

What Can Landlords Do if a Tenant Sublets Without Permission?

You can follow these steps when a tenant sublets without permission:

1. Discuss the issue with the tenant first

If your tenants sublet without permission, it’s worth discussing the issue with them before you take action. Some tenants sublet to others to make a profit and create unsafe conditions or overcrowding in the property. But in some cases, tenants use subletting to help them pay rent.

2. Seek to regularise the arrangement if practical

Depending on the circumstances, the subletting arrangement may not directly threaten the property or property owner and may not mean you’ve broken any regulations. In these cases, you can try to reach a mutual agreement where the sub-tenant signs a new tenancy agreement or chooses to move out.

3. If proceeding to eviction, serve a Section 8 notice citing Ground 12

If tenants are hostile or uncooperative, landlords can take legal action and start eviction using a Section 8 notice and citing the relevant ground, which is the only option for evicting tenants now that Section 21s have been abolished. In this scenario, Ground 12 (breach of tenancy agreement) will be the correct one to use.

4. Apply to court for a possession order if the tenant does not leave.

If the tenant does not leave following the eviction notice, landlords can apply to court for a possession order.

Get In Touch

For more advice and helpful information on letting out a property in East London and Essex, contact the team at Sandra Davidson. We will happily answer your questions regarding tenants and keeping up with landlord legislation. We cover areas such as Redbridge, Ilford, Barking & Dagenham, Romford, Chadwell Heath, Seven Kings, Enfield and the surrounding areas.

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