The
recent cost of living crisis has prompted many of those with spare rooms to
consider taking in a lodger to help boost their household income. The
government’s rent-a-room scheme makes this
option even more compelling: £7,500 of money earned from a live-in lodger is
now tax-free, which equates to £625 a month. Resident-landlords are eligible to
opt into the scheme whether or not they own their own home, or if they run a
guest house or bed and breakfast.
How Is a Lodger Defined?
A
lodger shares the resident’s home and space, unlike a tenant, living alongside
the resident in the property for an agreed amount of monthly rent and for a
specified period. Under the rent-a-room scheme there are two types of
tenancies. The first, excluded occupier, regards a tenant that lives in the
resident’s home, and the resident (or a member of their family) shares a
bathroom, kitchen or living room with them. As an excluded occupier, they must
be given ‘reasonable notice’ to end the letting, which typically means the
length of the agreed rental period.
A
live-in lodger is usually considered to be an occupier with basic protection if
they live in the resident’s home but don’t share any living space with them or
their family. Where this is the case, the resident will need a court order to evict
the lodger if they won’t leave when asked.
Pros and Cons of Taking in a
Live-In Lodger
The
benefits of taking in a live-in lodger include that it offers a way to earn a
potentially significant amount of money every month, and, for some, the extra
company in the home is appreciated. However, it might not be the best idea for
those concerned about losing their personal space – although renting out a room
to a lodger during the working week only could present a good compromise.
Legal Obligations
Experts in the
property field, such as entrepreneur Mario
Corrozzo, know that as
a prospective resident-landlord it’s important to meet potential space-sharers
before they move in. The potential lodger’s lifestyle and expectations should
be discussed to ensure that they are compatible with the resident’s own, and
references should be requested.
There are also
legal obligations that must be complied with to ensure the lodger’s safety and
wellbeing. These include ensuring furniture complies with fire regulations and
that the electrical system and any appliances supplied are safe, and to have
gas appliances checked annually by a registered Gas Safe engineer.
