Growing up in Stratford-on-Avon in the 1980s, a series of lodgers drifted in and out of our house and our lives. It wasn’t long after the popular sitcom Rising Damp had been on television and lots of people had lodgers.
Most of ours were students at the local college or actors at the RSC who were there for the season. One was a much-loved actor from a classic TV show, who used to start the day by gargling very loudly in the bathroom, followed by a series of rambunctious voice exercises. It was a novel way to wake up as a teenager. It didn’t occur to me at the time that these house guests would also be bringing in some much-needed additional income.
Fast forward to today, and the number of homeowners taking in a lodger has jumped by a whopping 89 per cent in the past three years, according to new data from property site SpareRoom.
Rising mortgage costs, inflation and the cost of living crisis has meant that many homeowners are feeling the squeeze. Given that these lodgers are paying an average of £739 a month, renting a room would seem the ideal solution for those needing a helping hand. The Government’s ‘Rent-a-Room’ initiative is a tax-free scheme for UK homeowners that means you don’t pay tax on the first £7,500 you earn.
So, if all of this has tempted you to take in a lodger, here are the five golden rules to consider…
Think about where to find a lodger
There are several websites for people looking for rooms from Gumtree to Zoopla to RoomGo. Some, however, have additional USPs. Badi, for example, which was launched in Spain in 2015, offers a free AI app to help match you with a lodger. You share information about your age, job and personality and the algorithm does the rest for you. Deposits can be paid via the app to confirm the reservation.
Other websites are geared towards people working in particular areas such as the NHS. Medistay helps match medical professionals with homeowners in their local area. Then there is Monday to Friday, a website for professionals looking for a room during the working week.
Provide a manual outlining house rules
Ben Ridley, an architect from London, has a four-year-old daughter who comes to stay at the weekend. He has been letting out two or three spare rooms for the past 14 months through Airbnb long-term lets at his home in Muswell Hill. People stay on average for three months, but some lodgers have stayed for six months.
“The best thing is that the lodgers are from all over the globe,” says Ridley. “It’s great learning about other cultures, especially other cuisines; we occasionally share dinners. It’s a bit like travelling without having to leave your front door.”
The downside, however, is that people are often on different time zones when they arrive, so he sometimes gets woken up by guest cooking in the middle of the night.
Ridley, who charges around £1,400 per month per room, provides every guest with a house manual outlining the key dos and don’ts, including doing the washing up and putting the loo seat down. “People’s expectations and cultural habits in the home are very different, so a house manual helps clarify things from the start,” he says.
Set boundaries from the outset
Kamalyn Kaur, a Glasgow-based psychotherapist, rented out her spare room to lodgers for six years before the pandemic and had around nine different lodgers during that time. “I had lodgers from Spain, the US, China and Australia and found it a great way of meeting new people,” she says.
“You need to establish a few house rules to ensure a harmonious environment and fair distribution of responsibilities,” she advises. “For example, I always discussed how shared finances such as rent, utility bills, internet etc would be distributed.”
Some room rental websites have a contract template you can share with your lodger which sets out the rights and responsibilities of both parties involved. This should outline rent costs, the amount of notice each party needs to give, the landlord’s responsibilities and what the lodger can and can’t do.
Be aware of legal and financial implications
Before you take in a lodger it’s advisable to get approval from your mortgage lender and home insurance provider.“It’s vital to read through your mortgage agreement, or speak to your provider, to ensure you won’t be breaking the terms of your mortgage,” says Ben Thompson, deputy CEO at Mortgage Advice Bureau.
He also recommends providing a written agreement first. “To avoid any potential issues down the line, homeowners should draw up a written contract outlining the terms and conditions, particularly when it comes to the deposit, rent, and notice periods.” You will also need to check beforehand whether a lodger has the right to live and work in the UK.
Anna Ambrose, national head of lettings at Strutt & Parker, says landlords of lodgers are responsible for ensuring they’ve done all the groundwork and are aware of the legal complexities before renting out a room. “First, you’ll need to ensure that your whole property, not just the room you’re letting out, passes gas and electrical safety checks that are conducted annually, as well as meeting fire and furnishing standards to guarantee compliance,” she says.
“When looking for a lodger, consider the same things that an established letting agent would when finding a tenant,” she adds. “This should include affordability checks, the ‘right to rent’ status of a potential tenant, referencing if appropriate, as well as proof of identity.”
Daniel Copley, a consumer expert at Zoopla, points out that you don’t have to be a homeowner to rent out a room. “[The] Rent a Room [scheme] is available to both homeowners and tenants with furnished accommodation. If you’re a tenant, you can still sublet spare rooms under Rent a Room, but make sure your own lease agreement permits it first, as many will not.”
If you live alone, you can currently get a 25 per cent single person discount on your council tax. If you take in a lodger, you need to bear in mind that you will lose this. There may be exceptions such as if the lodger is a full-time student.
Obviously, you also need to make sure the lodger will be someone you feel comfortable sharing your home with. “As this person will be living alongside you, it’s particularly important that they meet your requirements and that you are confident they are who they say they are: personal introductions and recommendations are a common route for landlords of lodgers for this reason,” says Ambrose.
Yoga teacher Cat Merrick lodged in a house with several others in Wolverhampton in 2004 and hit it off so much with her host, Graham that they became friends, then got together in 2007 – going on to marry and have two children.