LETTINGS NEWS: The rise in live-in landlords
You don’t have to have an impressive portfolio of properties to make worthwhile income as a landlord. Homeowners with a spare room are increasingly taking advantage of the benefits offered by taking in a lodger. If you have a spare room and are prepared to forgo your privacy, you can receive up to £4,250 tax-free from lodgers in rent each year, thanks to the government’s Rent a Room scheme. The twin aims of the scheme are to give renters more options and to help struggling homeowners cope with the higher cost of living.
It’s proving an attractive option for many: SpareRoom.co.uk estimates there has been a 70% increase in the number of live-in landlords looking for lodgers across the UK since 2011. And with demand for rooms from would-be lodgers is outstripping supply, you may be tempted to give it a go yourself. But there are a few things to consider before you move the boxes out of your spare room. Check the terms of your mortgage and your contents insurance to make sure a lodger and his/her belongings are covered. In addition, if you’re a single homeowner, bear in mind that you may lose your 25% council tax reduction. Finally, remember that if you do make more than £4,250 a year from renting a room (£354 a month), you will have to pay tax on the extra earnings.