You’ll need to have a room available for rent to a lodger, it should be in a good condition – clean, comfortable and furnished. The home should meet all health and safety standards too, including fire precautions and up-to-date gas safety checks.
Next, it’s crucial to consider who you think you’re most likely to have a successful landlord-lodger relationship with: the gender or age of your prospective lodger might be important to you, with some landlords preferring to live with someone close in age to them to increase the likelihood that they’ll have things in common. You might be a student who wants to rent to another student, or decide your home is better suited to someone older.
You should also decide if you’ll accept smokers or pets, or if you’ll charge extra for, for example, cleaning costs in either scenario.
Before you can advertise for a lodger you’ll also have to consider how long you’d like to have a lodger – this will affect the agreement you’re offering – and if your home is accessible or might not be suitable for elderly or disabled people.
It’s okay to have preferences with reasonable explanations – a woman might prefer to live with another woman, for example – but be cautious of discrimination. The law is a little more flexible in that regard than it is for landlords and letting agents, but it’s still illegal to discriminate against someone because of their race or nationality, and illegal to deny someone’s guide dog.
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Ultimately, if you’re looking to welcome a stranger into your home and both live alongside each other happily, it’s vital to be open-minded and compassionate from beginning to end of the process.
Once you’ve ironed out those details you can start advertising your room. The cheapest way is to use an online platform like SpareRoom that caters specifically to people looking for lodgers or house shares. It’s also a good idea to ask around locally or advertise on community notice boards if you’d prefer someone from your own area. You can sometimes advertise through a letting agent too, who can conduct viewings and help with the paperwork, but it’s comparatively very expensive.
It’s important to know how to get a lodger safely too. This usually means conducting some basic background checks such as asking for references from previous landlords or employers, plus meeting the potential lodger in person to get a feel for whether they’re the right fit for you and your home. It’s essential to be clear about house rules and what you expect from the lodger, whether it’s about cleaning up, having guests over or paying rent on time.
You might want to carry out a credit check on your potential lodger to confirm that they’re financially responsible and likely to pay rent on time. Some landlords also choose to request a deposit, which can cover any potential damage or unpaid rent. It’s a good idea to have a written agreement, even if it’s informal – it doesn’t have to be a full tenancy agreement, but a simple document outlining how much you’ll pay in rent, notice periods and house rules can go a long way in preventing problems further down the line.
Do you need permission to get a lodger?
If you own your home outright you typically don’t need anyone’s permission to get a lodger, though if you have a mortgage it’s advisable to check with your mortgage provider first. Some mortgage agreements feature clauses that say you must inform your lender before taking in a lodger, while others may have restrictions on subletting or renting out part of the property. Ignoring this could lead to seriously expensive issues with your mortgage provider.
If you’re a tenant and renting your home it can be a bit more complicated. Most tenancy agreements state that you need your landlord’s permission before you can sublet or take in a lodger and it’s crucial not to ignore that – get written approval from your landlord if this is the case. Taking in a lodger without permission could put you at risk of breaking your tenancy agreement, which could lead to eviction under section 8. Landlords might be open to the idea in some cases, especially if you’re struggling with rent or have been a reliable tenant.
Similar applies for people living in a council house or social housing, and it’s paramount to get permission from the council or housing association before making moves to get a lodger. Some might allow it but will likely have specific rules you need to follow.
Do you have to declare a lodger?
The UK government offers the Rent a Room scheme, which lets you earn up to £7,500 per year tax-free from renting out a furnished room in your home (or half of that if you’re renting out a space with someone else). If you earn more than this amount you’ll need to declare it on your tax return.
Even if you don’t make more than £7,500 from renting out your room it’s still worth keeping records of the rent you receive, just in case. If you do exceed the limit you’ll need to fill out a self-assessment tax return to declare the extra income and pay tax on the amount that exceeds the £7,500 threshold.
Don’t forget to check your home insurance policy. Some providers require you to tell them if you take in a lodger as it can change the terms of your coverage – not doing so could render your policy invalid and leave you uninsured.
Does having a lodger affect your benefits?
Any extra money earned could impact your entitlement to certain benefits, including rent from a lodger. It largely depends on which benefits you receive and who you’re living with.
Rent from a lodger usually won’t affect your universal credit payments as that money isn’t considered extra income by the Department for Work and Pensions (DWP). But if you’re letting a room to a family member it could change your universal credit payments – contact Citizens Advice if you’re not sure how the rules apply in your circumstances. It’s important to be proactive about making sure your details are up-to-date with the DWP or you risk being overpaid and having to pay it, plus some extra, back later.
Having a lodger can affect housing benefit (rather than the housing element of universal credit), again depending on who your lodger is. The first £20 per week you earn from their rent won’t impact your payments, but anything over that will be considered income and change how much you’re entitled to. Only half of it will count as income if you’re also providing meals for your lodger as part of the agreement.
Letting a room to a relative could result in your housing benefit payments reducing, though it’s dependent on how much they earn themselves and what kinds of benefits you or your lodger already claim.
You could also see payments reduced if you take in a lodger while claiming so-called legacy benefits such as employment and support allowance (ESA) and income support. It’s essential to notify the DWP as soon as you have a lodger in place to avoid your benefits being calculated incorrectly and leaving you with more to repay later. Whichever benefits you’re receiving, the best plan is to find a local adviser who can tailor advice to your circumstances and make sure you don’t fall foul of any rules.
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