I have a very close friend and we've agreed that she will move into the spare bedroom of my flat - viewed as her being an equal resident with me in a shared accommodation, not as a lodger in my spare bedroom.
However, I do not wish to charge her rent. To her, a year's rent is half her net pay. To me it is pocket change, an amount I could spend on a whim. I would feel terrible charging her such a significant sum when to me it would mean so little. I would prefer her to put that money aside for a house deposit so that if she ever chose to leave this arrangement she might be able to afford the deposit on a shared ownership scheme (staircased rent to buy) and then get a foot on the property ladder, if she so wished.
Should I still create a tenancy contract in this case? Is there any benefit to this for either of us if I don't intend to charge rent?
(I live in a leasehold flat with no mortgage. The leasehold agreement specifically permits subletting).