Posted on 1st December 2012

Why we're Becoming a Nation of Landlords

Martin Williamson, Head of Residential PropertyWe could be turning into a nation of landlords and landladies, according to new research. This last year has seen a huge rise in the number of homeowners renting out rooms to lodgers. According to a study by insurance provider LV, there are now more than 950,000 lodgers in the UK compared to 477,000 in 2011.

So why has the number of those opting to rent out a room in their home practically doubled in only a year?

The main and obvious reason, given by homeowners for taking in tenants is to boost their income. Up to £4,250 a year can be generated tax free under the Governments so-called rent a room scheme, for letting out a furnished room.

For many young professionals, the national average salary of £26,000 is not enough to afford a mortgage at the national average house price of around £160,000. Many in the Capital and other expensive areas are choosing to

rent a room during the working week and to live more cheaply elsewhere at other times. Conversely, many homeowners who have just managed to get on the housing ladder are choosing to take in a lodger to make ends meet.

The LV figures show that the average age of a lodger is 29 while six percent are aged 45 to 54. To service this surge in rooms for rent, websites and even speed-flatmating sessions, similar to speed networking, have emerged around the country.

With taking in lodgers now more popular than ever, there are legal guidelines to follow that can help you to avoid any pitfalls as a lodger or as a landlord.

Taking In a Lodger

  • You will need to inform your insurance provider that you are taking in a lodger as your cover may be voided if you dont.
  • If you claim any benefits, they will most likely be affected if you take in a lodger.
  • If you are taking someone into your home its vital that you at least like the potential lodger. Set up interviews with potential candidates to screen out unsuitable candidates.
  • Draw up an agreement and get your lodger to sign it. It will help clear up any misunderstandings that may arise.

Becoming a Lodger

  • Whether you are lodging with a friend or a complete stranger you will need to check that you are compatible.
  • Bring up any concerns you may have with your landlord as soon as they arise.
  • Get ground rules drawn up before you agree to become a lodger.
  • Finally, the legal status of your occupation can vary depending on whether you rent a room from someone who is a tenant himself or direct from a landlord and whether you share kitchen, bathroom and living facilities.

By Martin Williamson, Head of Residential Property, Latimer Hinks Solicitors www.latimerhinks.co.uk.

Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.