The number of homeowners taking in lodgers triples over 10 years
Research into the value of the tax relief claimed using the Rent a Room scheme shows huge take-up.
Since 2009, the total value of relief declared as a result of the government’s Rent-a-Room Scheme has increased by 187%, according to the latest available MHCLG data.
Launched by the Conservatives in 1992 the ”Rent a Room” scheme was intended to encourage people to utilise their otherwise unused spare rooms and provide much needed accommodation for workers and students, encouraging mobility of employment and education.
The original tax-free earnings allowance for lodger-earnings was £4250, increased to £7,500 in the 2016/17 tax year, and this amount is still the current allowance. The earnings must be declared to HMRC but there is no tax payable for annual earnings below the allowance.
Analysis of the data by property management service provider, Houst, has revealed the record amount of £140,500,000 was declared over the 2018/19 period, up from £48,800,000 in 2008/09.
The data demonstrates a considerable rise in the number of homeowners taking in lodgers over the last ten years, and those figures do not take into account anyone taking in lodgers and not declaring this to HMRC.
The increasing number of Rent-a-Room declarations to HMRC indicates that more people are recognising the benefits of earning extra income from taking in a lodger – as a live-in landlord, you are allowed up to two ‘non-family’ lodgers before your property can be classed as a HMO, with all the additional regulations that implies.
Covid push
Houst speculates that this trend is likely to have intensified dramatically since the onset of the Coronavirus pandemic, the period of time for which MHCLG data is currently unavailable.
Taking in lodgers received a dramatic boost in numbers during the economic crash and great recession of 2008 and has since continued with the popularity of letting out spare rooms with the advent of Airbnb type renters. Utilising spare rooms as a simple means using new technology to provide an additional income stream has now become a major industry in itself.
Tom Jones, Co-Founder and Chief Commercial Officer of Houst, says: “Thanks to the digital solutions of the last decade, homeowners are now able to fill their properties quickly and efficiently, whether that be a spare room or a second home, and generate a secure and regular source of income. Given the enormous economic uncertainty, people are increasingly viewing personal assets as a vehicle to drive up their incomes by turning their homes into money-making properties.
“The reality of the pandemic is that it has forced many to reconsider their living arrangements and look directly at how we occupy our homes and how exactly they could be used to stave off economic concerns. The pandemic has transformed how millions see and use their homes, leading many to reconsider its potential as a stable driver of income.”
Warning
Anyone considering renting out a room in their home should be aware that permissions may be necessary: from their landlord if they are a leaseholder, from a mortgage provider and from their insurer.
There could also be considerations for the impact this may have on council tax liability, and any benefits the lodger landlord is claiming.
In addition, the property must be safe, free from and hazards that could cause injury. Also, the landlord must be letting out his or her own residence and share facilities such as bathroom and kitchen with the lodger. The property must meet certain general letting requirements including annual gas checks and five yearlyelectrical system checks, and all the furniture must meet the general letting safety standards.
Finally, lodgers come under the Right-to-Rent regulations, where the landlord must check the immigration status of their lodgers. It goes without saying that the income from the lodger arrangement must be declared on the next available tax return.
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The number of homeowners taking in lodgers triples over 10 years | LandlordZONE.
View Full Article: The number of homeowners taking in lodgers triples over 10 years
Post comment
Categories
- Landlords (19)
- Real Estate (9)
- Renewables & Green Issues (1)
- Rental Property Investment (1)
- Tenants (21)
- Uncategorized (11,917)
Archives
- December 2024 (44)
- November 2024 (64)
- October 2024 (82)
- September 2024 (69)
- August 2024 (55)
- July 2024 (64)
- June 2024 (54)
- May 2024 (73)
- April 2024 (59)
- March 2024 (49)
- February 2024 (57)
- January 2024 (58)
- December 2023 (56)
- November 2023 (59)
- October 2023 (67)
- September 2023 (136)
- August 2023 (131)
- July 2023 (129)
- June 2023 (128)
- May 2023 (140)
- April 2023 (121)
- March 2023 (168)
- February 2023 (155)
- January 2023 (152)
- December 2022 (136)
- November 2022 (158)
- October 2022 (146)
- September 2022 (148)
- August 2022 (169)
- July 2022 (124)
- June 2022 (124)
- May 2022 (130)
- April 2022 (116)
- March 2022 (155)
- February 2022 (124)
- January 2022 (120)
- December 2021 (117)
- November 2021 (139)
- October 2021 (130)
- September 2021 (138)
- August 2021 (110)
- July 2021 (110)
- June 2021 (60)
- May 2021 (127)
- April 2021 (122)
- March 2021 (156)
- February 2021 (154)
- January 2021 (133)
- December 2020 (126)
- November 2020 (159)
- October 2020 (169)
- September 2020 (181)
- August 2020 (147)
- July 2020 (172)
- June 2020 (158)
- May 2020 (177)
- April 2020 (188)
- March 2020 (234)
- February 2020 (212)
- January 2020 (164)
- December 2019 (107)
- November 2019 (131)
- October 2019 (145)
- September 2019 (123)
- August 2019 (112)
- July 2019 (93)
- June 2019 (82)
- May 2019 (94)
- April 2019 (88)
- March 2019 (78)
- February 2019 (77)
- January 2019 (71)
- December 2018 (37)
- November 2018 (85)
- October 2018 (108)
- September 2018 (110)
- August 2018 (135)
- July 2018 (140)
- June 2018 (118)
- May 2018 (113)
- April 2018 (64)
- March 2018 (96)
- February 2018 (82)
- January 2018 (92)
- December 2017 (62)
- November 2017 (100)
- October 2017 (105)
- September 2017 (97)
- August 2017 (101)
- July 2017 (104)
- June 2017 (155)
- May 2017 (135)
- April 2017 (113)
- March 2017 (138)
- February 2017 (150)
- January 2017 (127)
- December 2016 (90)
- November 2016 (135)
- October 2016 (149)
- September 2016 (135)
- August 2016 (48)
- July 2016 (52)
- June 2016 (54)
- May 2016 (52)
- April 2016 (24)
- October 2014 (8)
- April 2012 (2)
- December 2011 (2)
- November 2011 (10)
- October 2011 (9)
- September 2011 (9)
- August 2011 (3)
Calendar
Recent Posts
- Landlords could pay tenants up to two years’ rent for failing Decent Homes Standard as PBSA is exempt
- Landlords’ Rights Bill: Let’s tell the government what we want
- 2025 will be crucial for leasehold reform as secondary legislation takes shape
- Reeves inflationary budget puts mockers on Bank Base Rate reduction
- How to Avoid SDLT Hikes In 2025