There has never been a better time to rent out a room in your house.
The rental market is very hot right now, and with the government’s Rent a Room scheme, renting out a spare room in your property could just provide you with the income you need to battle the cost of living crisis.
Unsure what you would need to do? OpenRent can help!
OpenRent can exclusively reveal that the average rental price in the UK increased by an average of 14.81% across July, August and September this year compared to last. Inflation hit a high in July this year at around 10%. Therefore, rental prices are rising between 4-5% faster than inflation.
The nation faces a potentially unprecedented cost of living crisis. In the rental market, the price rises we’re seeing are partially a factor of a massive demand for homes, with not enough supply to go around. We’ve seen tenant demand double compared to last year, which itself was already considered a hot market!
There has never been a better time to rent a spare room on OpenRent!
It’s Tax Free!
With the government’s Rent a Room scheme the first £7,500 earned from renting out furnished accommodation in your home is tax free. (This threshold is halved if you share this income with another person).
The scheme can be used by resident landlords, whether you own your home or not. Unfortunately, it can’t be used by those who have converted part of their home into a separate dwelling – this would not count as renting out a room in your house.
You can read more about the scheme and how to opt in on the government website.
How to Advertise a Spare Room on OpenRent
You can then fill out all of the details for the room in the rest of the form – e.g. tenancy length, rental price, property features.
We have written a full guide on how to advertise a room in a shared house on OpenRent here. You may also wish to read our guide on how to create the best advert and find the most suitable tenant, as well as our advice on setting tenant preferences for lodgers.
Potential Property Modifications
Before renting out a room in your house you may want to think about making some modifications to your property.
For example, it might be nice for the tenant to be able to lock their bedroom door and have their own key for the room.
If it helps make you feel more comfortable, you could consider installing locks in potentially private areas such as bathrooms and your own bedroom.
Long or Short-Term Contracts?
It’s worth considering what length of contract would be most suitable for you.
There is no right answer with this one – the most suitable contract length will vary depending on your situation.
However, given the current levels of demand in the rental market, if your occupancy rate is low you may achieve a higher and more secure income stream from doing a longer term let (6 months or more).
If you do rent out a room in your house, you will require a type of tenancy contract known as a lodger agreement. You can read more about lodger agreements and your rights as a live-in landlord here.
For more information about renting out a room in your home, you can also read the government’s full guide here.