If you’re considering taking in a lodger, you’re not alone.
According to the Mirror, last year over 89,000 households rented out a bedroom to a boarder for the first time, and the majority of these people did so because they needed the money to help cover their mortgage. According to a study by SpareRoom, families can boost their income by an average of £5,904 a year (although only £4,250 of that is tax free).
The lodger trend is helping a lot of people find an affordable place to live across the country – but experts are urging the Government to increase the tax relief available under the Rent a Room Scheme, to create a bigger incentive to encourage even more people to start taking in lodgers.
So, if it’s something you’re thinking about, or perhaps it’s something you’ve never even considered, here’s what you need to know:
The legal stuff
If you’re in a position where you have space for a lodger, always make sure that you’re within your rights to have one. In many cases, if you’re renting your house, your rental agreement will not allow you to sublet a room – you will need to check your tenancy agreement and it also makes sense to confirm in writing with your landlord. Even if you own your home, you may need to get permission from your mortgage provider, so it’s always best to check.
Your home contents insurance may be affected too – your insurer may increase your premium, as there could be an increased risk that you’ll need to make a claim – for example, if your lodger has an accident and injures themselves in your home and tries to sue you. If you don’t let your insurer know you’ve taken in a lodger, your policy could be void.
It’s also important to make sure that your lodger knows that their possessions won’t be covered by your contents insurance and that they’ll need to get a policy of their own.
Any income you make from a lodger may affect your benefits and tax credit entitlement, so it’s always a good idea to speak to an advisor first who can do the sums for you, to see if you’d actually be better off.
The room and shared spaces
Your spare room needs to be in a ‘fit and proper’ condition in order to rent it out – that means it must be clean, presentable and be free of any hazards. Your furniture has to comply with safety regs, so check the labels (particularly on older pieces) to make sure it’s compliant with fire safety regulations.
Your appliances (whether they’re in the lodger’s room or in the shared areas) must be kept it good working order too, as gas safety regulations apply – the easiest way to do this is to make sure an annual safety check is carried out by an engineer. As a landlord, you’re legally responsible for this, so you must keep copies of the gas safety certificates the engineer will issue.
You also need to check your electrics and electrical appliances – like your kettle and toaster – are all in proper working order. Although there’s no requirements for an annual electrical safety checks, you should make sure that the appliances are in good working order regularly yourself.
Write up an agreement
As with anything, clear communication from the outset will save you a world of problems down the line. It’s always best to have something in writing that outlines the details of the agreement between you and your lodger.
Apart from money, you’ll want to be clear on what you expect from them concerning use of other rooms in the house, tidiness, noise levels and so forth, and it may also be useful to draw up an inventory of the furniture and fittings, in case anything gets damaged.
So, once you’ve got all the legalities and other bits sorted, you can start to advertise your room. There are websites that make it really easy - EasyRoommate or Spareroom are a good starting point and getting the room online will maximise the number of people that will see it!
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.