Read the small print
Check your mortgage or tenancy agreement. You may need to get permission from your mortgage lender or landlord/local authority to take in a lodger.
Do your sums
If you live alone, you will normally lose the 25% single person discount on your council tax (unless, for example, your lodger is a student or stays Monday to Friday and pays council tax somewhere else). Similarly, if you receive any benefits, inform your local benefits agency. It’s likely that any payments will be affected if you take in a lodger, so make sure you won’t be out of pocket.
Tell your insurer
Alert your insurer that you plan to rent a room or floor in your house, so that your home contents are still protected and you can let your lodger know if they’ll need their own insurance.
Tell the tax office
At the end of the tax year, tell HMRC if you earn over £4,250 per year from your lodger. If you fill out a tax return anyway, make sure you include the income.
Lodger or tenant?
A lodger lives in a furnished room or floor of your home, as part of your household, and shares some of your accommodation, such as the kitchen or bathroom. They don't have the right to stop you from entering ‘their’ room. But if you put a lock on their door and give your lodger a key, they become a ‘tenant’, which gives them the right to ban you from entering their room. This is because a tenant (as opposed to a lodger) ‘owns’ the room where they live for the period of their tenancy/lease. This also means that you may have to get a court order to evict them!
Finding a lodger
- Ask around your friends or neighbours first
- Check out flatshare websites such as Easyroommate
- Gumtree or SpareRoom
- Get the best from your room listing
- Always ask for lodgers for references, and follow them up. You may even want to do a credit check for peace of mind.
A new legal requirement requires landlords to check if potential lodgers have the right to remain in the country or face a £3,000 fine. At the moment, the rules on checking nationality/visa status apply only in the West Midlands, but they are due to be rolled out across other areas of the UK.
You’re also responsible for
- Making sure your home is clean and in a fit state of repair
- Electrical safety (including all appliances) and fire safety – check the labels of older furniture to ensure it complies with latest legislation
- An annual gas safety check
The rental contract
It makes sense to draw up a written agreement about the rent, what it covers (eg bills and/or additional services), and who is responsible for what, that you and the lodger both sign. You can both refer to it should any disagreement arise, for example, about the deposit, inventory, pets or use of the garden.
Template agreements are available from legal stationers or online, with standard clauses that you can adapt to suit your needs.
Tip: ask your lodger to set up a standing order for the rent, which takes the personal element out of collecting the money.
Find out more
For advice and information, including what to do if the arrangement doesn’t work out or if you need your room back, see Citizen Advice or The Property Landlord.
When looking at insurance, you may come across some terms you aren't familiar with. Getting to grips with these terms should help you understand what your policy covers.