The variety of owners taking in a lodger has jumped 89 per cent in three years, in line with new knowledge.
The findings by the flatshare web site SpareRoom discovered that numbers had elevated by this quantity when evaluating January 2024 with January 2021.
It comes as the typical quantity a lodger pays to lease a room elevated to £739 per 30 days on the finish of 2023, up from £658 on the finish of 2022, an increase of 12 per cent.
Room to lease: The variety of owners taking in a lodger is up 89% in three years, in line with SpareRoom
It stated that January is a busy month for the positioning, as individuals look to lease out their spare rooms to make further earnings after the monetary pressure of the festive interval.
Nevertheless, it urged that the excessive value of dwelling, compounded by excessive mortgage charges in 2023, means individuals are on the lookout for methods to make more money to afford to remain of their houses.
With this in thoughts, it referred to as on the Authorities to extend the edge in its Lease a Room scheme.
It presently permits individuals to earn as much as £7,500 a 12 months tax free by renting out a room of their house, however SpareRoom needs it to up this restrict.
SpareRoom stated that this could not solely serving to struggling owners, however would additionally create desperately wanted provide within the rental market.
Matt Hutchinson of SpareRoom, stated: ’Residing prices have soared just lately, and the beginning of the 12 months is at all times a tricky time as individuals face the monetary hangover from the vacations, alongside elevated heating prices and payments.
’So, it is no shock the variety of owners on the lookout for a lodger has spiked within the first week of 2024.
’Notably if you take a look at how a lot you possibly can earn by renting out your spare room.
’You’d must work numerous hours in a second job to come back near the earnings you possibly can earn from a lodger.’
The typical value of renting a room in Britain has reached £739 a month, says SpareRoom
| Area | Common month-to-month room lease This autumn 2023 | Common month-to-month room lease This autumn 2022 | Annual change This autumn 2023 vs This autumn 2022 |
|---|---|---|---|
| East Anglia | £651 | £599 | 9% |
| East Midlands | £562 | £512 | 10% |
| North East | £533 | £494 | 8% |
| North West | £581 | £522 | 11% |
| Northern Eire | £558 | £483 | 16% |
| Scotland | £682 | £606 | 12% |
| South East | £732 | £657 | 11% |
| South West | £649 | £593 | 9% |
| Wales | £574 | £530 | 8% |
| West Midlands | £559 | £495 | 13% |
| Yorkshire and Humberside | £555 | £507 | 9% |
| London | £1,014 | £934 | 9% |
| UK | £739 | £658 | 12% |
| UK (excl London) | £647 | £582 | 11% |
| Supply: SpareRoom |
Including to the rental provide
Mr Hutchinson added: ’The excellent news is, all these further rooms are actually serving to so as to add provide to the rental market, which has been in decline for a number of years.
’If Authorities needs to assist each owners and struggling renters, they need to significantly think about rising the tax threshold for the Lease a Room Scheme, an incentive particularly designed to encourage individuals to lease out their spare rooms.
’It is an actual win-win coverage, and there aren’t lots of these round in the meanwhile.’
Common room rents
The most recent SpareRoom UK Rental Index exhibits the typical lease on a room within the UK now sits at £739 a month.
Nevertheless, it varies throughout the nation from £533 a month within the North East to a major £1,014 a month in London.
The Lease a Room scheme permits a house owner to set free to a lodger a furnished room of their primary residence whereas they’re dwelling in it and never pay any tax on the earnings, offering it doesn’t exceed £7,500 in any tax 12 months.
If you’re letting the room in a property you personal collectively with one other individual, you possibly can earn £3,750 every.
You do not even must be the proprietor of the property to take benefit, though you will have to get permission out of your landlord if you’re the tenant.
And if you happen to earn greater than the edge, you may have to finish a tax return and select to choose into the scheme to say your tax-free allowance – after which pay tax on something above it.
Property brokers agreed that rising the tax reduction can be a welcome transfer for owners and renters.
North London property agent Jeremy Leaf stated: ’It’s a good suggestion to make renting a room extra enticing because the strain for rented lodging, notably final 12 months, was intense.
’Provide could not meet demand with landlords leaving the sector, normally for tax and regulatory causes, in addition to excessive mortgage charges, and the online end result was rents saved going up and up.
’Subsequently, short-term rental platforms resembling Airbnb have turn into rather more standard however they will also be costly. The rent-a-room scheme affords a extra versatile method for all events so it could undoubtedly fill a niche available in the market.
’Nevertheless, it is rather vital that regulation is powerful to guard all events, in order that owners can get their properties again to themselves when they need and tenants may be completely happy that their lodging is of applicable high quality in addition to assembly well being and security requirements.’
