Opening Your Doors to Lodgers

29th August 2014 posted in Landlords

Having multiple people in one household can sometimes be an inconvenience, due to the morning queue for showers, debates over the TV channel and the split of the bills. However, a great way of cutting costs, and something a lot of homeowners nowadays are taking part in, is bringing lodgers into their spare rooms. The attraction probably comes from the fact that homeowners can now enjoy a tax-free income when taking part in the governments Rent a Room scheme.

With benefits such as a shorter notice period when wanting to end the letting, as well as the potential to earn up to £4250 per year tax free, it is no surprise that the percentage of home owners with lodgers has almost doubled from 1.4% in 2009, to 2.7% currently.

There is now an estimated 15 million spare rooms throughout the UK alone. We have seen both a rise in inflation as well as an increase in the cost of living over the past 5 years. Given these two statements, it would seem a sensible step for those with spare rooms, who are also finding current times hard, to take part in the Rent a Room scheme, consequently making their mortgage cheaper, reducing their annual tax amount, as well as helping the community.

According to a report from, roughly 70% of active landlords are now on the lookout for lodgers. Taking in a lodger may seem scary to some, as the typical stereotype of a lodger is that of a young, untrustworthy stranger. However, with the current housing crisis, the average age of a lodger is now 31, with a fifth being aged between 36 and 50.  This is no surprise, as the renting costs for single professionals are now extortionate, meaning the option of a spare room may seem much more attractive.

If you are a current landlord looking to take in a lodger, it may be worthwhile to brush up on your understanding of the Rent a Room scheme. Basically, you are eligible to take part in the scheme if you are a resident landlord, whether or not you own the home. If you run a bed and breakfast or have a guest house you are also eligible. The only time you would not be eligible is if you have purposely converted your property into separate flats.

If you take in a lodger, you can earn up to £4250 tax free, however, this is halved if you share the home with a partner. This tax exemption is available from renting out a single room or a whole floor.

The tax exemption should be automatic providing you earn less than the income threshold, however, if you earn more than the income threshold you will have to fill out a tax return form and then opt in for the scheme, recording your income and expenses on the property pages of your tax returns.

A few things to consider if you are a landlord is the mortgage agreement you have set up. The majority of mortgage agreements allow you to rent a room, but it is worth double checking before doing so. Also your contents insurance may rise in premiums due to the added risk of a lodger, so be sure to inform your insurer and ask about the potential cost increase.

If you are considering taking in a lodger, there are a number of websites connecting landlords with them, such as, and Make sure you request a reference from the potential lodger, as well as taking a suitable deposit in the case of any damages to your property. Also, remember to always try get to know the lodger before opening your doors to them.

Hunters have over 100 offices nationwide including Camberwell