Running a business from a rented property

Are you a tenant who wants to run a business from your rental home or council house? Our step-by-step guide covers everything you need to know to get started...

Our experts

We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality.
Written and reviewed by: is reader supported – we may earn a commission from our recommendations, at no extra cost to you and without impacting our editorial impartiality.

When you’re in the early stages of getting a start-up idea off the ground, running a business from home is a great way to cut costs and get going.

But while starting a business from your own property is pretty straightforward, what happens if you’re a tenant looking to run a business from a rental property or council house?

The good news is that it’s completely legal to do so – however, there are several very important steps you’ll need to follow before you can start. In this article, we’ll explain how to:

  1. | Get written permission
  2. | Make an agreement with your landlord
  3. | Decide how business bills will be paid
  4. | Work out whether you’ll need to pay business rates
  5. | Get home-based business insurance

We’ll also provide information on finding the right workspace for your business when you feel the time is right to run it away from your home.

Click the links or read on for all you need to know about running a business from a rental property…

1. Get written permission

Before starting your business, the very first thing you’ll need to do is get written permission from your landlord. This will simply entail contacting your landlord and asking him or her to permit you, in writing, to run a business from their property.


Can I run a business from my council house?

Yes, in most cases you can – you’ll just need to gain permission from your local council or housing association. Get in touch with them or visit their website to find out what the process is for gaining permission in your local area, as some councils will differ in what they need you to do.

You’ll usually be required to fill out and return a form, and provide information including:

  • Full details of your planned business use
  • Details of any changes that may be made to the property
  • Details of any advertisements or signs that will be put around the building
  • Information about any commercial vehicles that may be used
  • The levels of noise you’re likely to create, your operating hours, and whether this might disturb your neighbours
  • Any planned extra buildings you’d like to put up, such as sheds or outbuildings


In both cases, you should take a look over your tenancy agreement beforehand – but don’t be dismayed if yours expressly prohibits you from running a business from the property.

You can still ask for permission anyway; this just means that, if permission is granted, your agreement will need to be changed and re-signed.

Remember, if you’re found to be running a business from the property without having gained permission, you’ll likely be in breach of your tenancy agreement which – as you probably know – could have some unfortunate consequences.


Conditions for running a business from a rented property or council house

It’s worth knowing that the law is on your side. Government regulations introduced in 2015 under the Small Business, Enterprise and Employment Act dictate that landlords and councils can’t unreasonably deny you permission to get going.

However, there are three conditions which, if you cannot meet them, give your landlord or council the right to turn your request down if they choose. These are:

1. Your business shouldn’t cause damage

You might not win permission to start up at home if your operations are likely to cause damage, or significant wear and tear, to the property.

Businesses that could be a no-no in this respect may include:

  • Crafty businesses that require paints, dyes, molten metals and other potentially-staining materials
  • Childminding or pet sitting businesses, as these might cause damage to carpets and furniture
  • Beauty start-ups that use creams, waxes, dyes and more
  • Any businesses that use heavy machinery and equipment

2. Your business shouldn’t disturb the neighbours

To work out how disruptive your business might be to the locals, ask yourself:

    • Is your business potentially noisy? Will it require loud music – perhaps if you’re starting up as a dance, music or fitness instructor – or loud machinery or tools? Do your neighbours live near enough that they’ll hear? Will you need to operate at unsociable hours?


  • Will your business lead to increased footfall or traffic? If you’ll be receiving clients, customers or deliveries at the property, might this cause parking issues and congestion in the local area?

If it’s likely that your business is going to have an impact on your neighbours’ living conditions, it may be that you need to get planning permission from your local council before you can go ahead.

3. Your business shouldn’t take up too much room

Your landlord or council will want the property to remain a living space first and foremost: if the property is deemed ‘commercial’ rather than ‘residential’, it’ll be in breach of its mortgage agreement, leading to problems for its owner.

In short, you’ll usually be limited to using up to 40% of the property for business purposes.

This won’t be an issue if you’ll simply be working in one or two rooms, but if you need lots of space for things like stock and equipment, you might need to reconsider your options.


If your landlord refuses permission for a reason you don’t believe is valid, try giving them a call or arranging a chat to talk them through your business, and explain why it should be acceptable.

If your landlord still won’t grant permission and doesn’t have a reasonable explanation, get in touch with your local authority to see what can be done about the situation.

2. Agree on the finer points with your landlord

If there’s something about your business that worries your landlord, it may be that he/she grants permission but asks for a compromise on your part. For example, they might permit you to run the business as long as:

  • You hold meetings elsewhere to avoid congestion on the street
  • You only use certain equipment and materials in a particular place, such as the garage or shed
  • You only work within certain hours
  • You pay to repair any damages or wear and tear caused by the running of the business yourself


If your landlord’s requests will negatively impact your business to the point that you cannot agree to them, it may be worth looking into joining a specialist workspace instead. You can find workspaces that’ll fit your business’ needs by filling in the form at the top of this page.


3. Decide how any additional bills will be paid

Importantly, you’ll need to consider how much your bills are likely to increase as a result of running the business from home.

While the mere act of being at home all day instead of out and about will boost your energy bills, certain business operations can lead to specific and significant increases; for example:

  • A hairdressing business might require lots of extra water
  • A catering business may use a lot of gas (it might be possible to get a better deal with a gas price comparison as on this page
  • A business that uses a computer could boost electricity bills

If you pay the bills yourself, you shouldn’t need to discuss this with your landlord (though you will need to prepare yourself for the additional cost).

However, if your bills are included in your monthly rent, you and your landlord will need to decide how they are to be covered.

It may be that he or she chooses to raise your rent slightly to cover the additional cost, or asks for an additional payment each month to cover the difference. Just keep your eye on the numbers here, as you don’t want to be overcharged.


Need to know: Being self-employed means you can claim certain costs as expenses, so it may be that you can claim for certain business-related bills – or even claim back a portion of your rent for the room you’re running your business from.Take a look at the government’s information to find out what you can claim.


4. Work out whether you’ll need to pay business rates

For the most part, owners of home-based businesses won’t need to pay business rates on top of their council tax. However, you may need to pay them if:

  • You use a significant portion of the property for your business
  • Your customers come to the property to buy or receive the products or services you sell
  • You’ve made changes to the property to accommodate your business
  • Your property is both residential and commercial – for example, if you run a shop and are renting the flat above it
  • Your business employs other people who also work at the property

Find out how to calculate your business rates with our guide.

5. Get home-based business insurance

As with any business, big or small, in order to run a start-up from home you’ll need business insurance.

You can find a comprehensive list of the insurance policies you’ll need to consider for your home-based business here – but in general, the following policies are often key:

    • Public liability insurance: You’ll likely need this if you come into regular contact with your customers – for example, if they visit you at your home.


    • Product liability insurance: This could be important for you if you sell products.


    • Professional indemnity insurance: If you deal in providing specialist expertise or skills to clients, this is a key cover to have.


  • Building and contents insurance: It’ll likely serve you well to be covered by this if you keep a lot of stock or expensive equipment at home.

Remember, when it comes to buildings and contents insurance, chances are your landlord will already have it on the property; so be sure to ask them what exactly is covered under the policy.


Important: There’s a chance that some of the insurance your landlord has on the property could be negated by the business insurance policies you get. You’ll need to check through this with them.


Similarly, it may be that the nature of your business requires you to get a particular license before you can operate legally. You can use the government’s license finder tool to work out whether or not your business needs to be licensed.


Moving on from your rented property: Finding the right coworking space

When you’ve run the business from home for a while, you might decide that – having made good progress and started to grow – the time is right for you to move into an office instead.

At this juncture, a coworking space can serve as an excellent option for sole traders, start-ups and small businesses. With its collaborative, creative atmosphere and affordable desks, you might find that coworking is the natural next step between running a business from home and paying for a private office. is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

Written by:

Leave a comment

Leave a reply

We value your comments but kindly requests all posts are on topic, constructive and respectful. Please review our commenting policy.

Back to Top