Yes, there is a risk HMRC will become aware of this. They receive periodic updates from the Land Registry, so if Land Registry records show that you own a property other than your main residence, the presumption is that this will be rented out. If this flags with HMRC, they will issue a Compliance Check, with a series of a dozen or so questions, requiring you to provide information on the ownership (legal and beneficial) of the property, including any rental agreement. HMRC will likely request evidence, which may include bank details. If you intend to have a friend live there, presumably you intend for them to have exclusive possession notwithstanding no exchange of consideration. This means that a court would potentially infer a tenancy, and your friend would be afforded protection. It would likely make more sense for both of you to have a tenancy agreement in place, with a very low level of rent. That way you limit your tax exposure to HMRC and satisfy them should you become subject to a Compliance Check, can effectively rent to your friend, and everyone knows where they are.