HOW TO RENT OUT YOUR SPARE ROOM IN LONDON
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If you’re a homeowner in London and have a spare room in your property, then you might want to consider letting it out to one of the 20,000 people that visit our site each month looking for rental accommodation.
Why rent out a room in your house?
The most obvious reason to let out a room in your house, is to gain some extra income each month, which could be really handy during a period of economic difficulty, like we’ve recently seen. It’s also worth knowing that the Inland Revenue operate a Rent a Room Scheme, which allows you to earn up to GBP7500.00 tax-free from a lodger – check out the HMRC website for full details on this.
Finding a suitable lodger
First of all, you should decide on what you’re looking for from a lodger/lodging situation. Work out how much you wish to charge for your room. Be realistic and check out Upadas a guide to what other private landlords are charging in the local area.
Work out your flatmate criteria – are you looking for a single person, a male or female, smoker or non-smoker, professional or student, the list is endless.
Post an ad on Upad and receive an average of 31 tenant enquiries.
If you live by yourself, then having a lodger might be a good lifestyle choice for you. Depending on who you choose to share your humble abode, you could gain a new friend, or at least feel safer in the knowledge that there might be someone to watch your property if you leave London for a long weekend.
It may well be that you’re unable to get onto the property ladder without the possibility of income that you could make from lodging. Of course if the numbers work, then it’s probably a better bet in the long run to buy a 2 bed flat and let out one of the rooms, than to go for a one bed or studio. If you’ve purchased a property in a popular residential area of London, then you should find that there’s a decent demand for lodgers. Plenty of people moving to London like to rent in an area, before committing to purchasing a property of their own, so take advantage of this cross section of people by opening your home to them.
Now, it would be foolish of us not to provide you with some facts and advice before you take the plunge and invite the nearest ‘random’ you can find to live with you.
Although it is not legally necessary, you’d be mad not to draw up a legal contact with your lodger before moving day. Have everything set out so there’s no room for disagreements and court cases. At the very least, you should establish on paper the following:
- Rent (amounts, payment dates and payment methods – standing orders are best)
- House rules – overnight guests, pets, smoking
- Notice periods – how much notice would either landlord or lodger have to give when calling time on the arrangement – 1-2 months would be the norm
- Deposit – establish how much a deposit would be, what it covers and at what point your lodger will get it back when he/she decides to leave your property.
- Inventory – have an inventory drawn up on the standard and contents of their room. Make sure that the lodger agrees with the list before making them sign it. You might want to include ‘before’ photos of the accommodation before they move in, just in case you need to compare them to any undesirable ‘after’ shots once your lodger has left.
Here are a number of legal things for you to bear in mind
- The property that you’re letting out a room in, must be your main place of residence.
- The maximum number of lodgers that you can have in our property is 2. Any more than this and your property would be categorised as an HMO (House with Multiple Occupancy), which means that you’d need to follow extra requirements that are outside the scope of what is described on this page.
- You should inform your mortgage lender that you’re letting out a room (it shouldn’t usually be problematic, but it’s always best to make them aware)
- Inform your insurance company as they may need to change the policy description slightly – again this shouldn’t usually be a headache if you’re upfront with them about it.
- You will need to have an annual gas check carried out in your property.
- You are not required to, but it’s also a good idea to have an electrical test carried out.
- If you are entitled to any benefits, then they may be affected by the introduction of a paid lodger into your home, so inform your local authority before you take anyone in.
- You need to make sure that your lodger will not have exclusive possession over any part of your property. For instance, all ‘shared’ communal areas must be exactly that – no kitchen or living room of their own, except of course for their own bedroom.
Now you’ve learned a little more about letting a room out in your house in London, get the room ready, take some pictures, post an ad on Upad and sit back and wait for the lodgers to arrive!
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