Everything You Need to Know About Getting a Lodger
If you have empty rooms in your house just sitting there, you might be thinking that it would be sensible to make them work a little harder and earn you some money – by having a lodger live in your home. It’s not a solution that works for everyone, but having a lodger can be both a boost to your income, and provide friendship and company to both you and your lodger. Find out the advantages and disadvantages of having a lodger, and hopefully our guide will help you decide if having a lodger is right for you.
In this article:
- Things to check before getting a lodger
- How to find a lodger
- Advantages of having a lodger
- Disadvantages of having a lodger
Before you go out and find a lodger, you should be prepared for what it entails, and take certain steps first to protect yourself and your property. Here’s a quick checklist for things you should check before getting a lodger.
Confirm you can legally take in a lodger
If you’re paying for a mortgage and don’t own your home outright, you’ll need to check with your mortgage lender to make sure that you can legally take in a lodger under the terms of your mortgage agreement.
If you have a leasehold, or live in a shared ownership property, you might also need permission from your landlord.
If you’re renting, you might have set rights about taking in a lodger – secure and flexible tenants have a legal right to take in a lodger, and don’t always need their landlord’s consent. You should check your tenancy agreement, however – it might say that you need to tell your landlord about any changes to your household, including if someone else is living at your address.
You should always check the legalities before you start looking for a lodger, to avoid a nasty surprise further down the line.
Do you have the right insurance?
When taking in a lodger you’ll need to have buildings insurance – which you should have anyway – but you don’t have to insure your lodger’s possessions. If you want to include their items on your contents insurance, it could cause your insurance premium to go up.
Alternatively, you and your lodger could look into room contents insurance, which is widely offered and allows your lodger to cover their belongings without affecting your policy. In either case, you should make sure that your insurance provider knows and is informed – or you risk your belongings not being covered should anything happen. You should also check if you’ll need to pay any extra premiums – for example if you have accidental damage cover.
Can I have a lodger in my council house?
If you’re a secure tenant with a lifetime tenancy, then having a lodger in your council house is legally permitted – but some tenancy agreements might say that you need to inform the council ahead of time, so check and make sure. Flexible and fixed period council house tenancies can also rent to lodgers, but obviously this will depend on how you advertise for a lodger just in case your tenancy isn’t renewed.
Will having a lodger change your benefits?
If you receive any kind of housing-related benefit, like Housing Benefit or Universal Credit, having a lodger will probably have an impact. You can find more information on this at Citizen’s Advice, and it’s worth calculating carefully ahead of time whether having the extra income from a lodger renting a room in your home would offset any shortfall from your benefits.
Do lodgers pay council tax?
When you’re setting your rent for a lodger, you should factor in council tax. If you’re currently living alone and benefit from the 25% single person discount on your council tax, you’ll lose this if you have a lodger living in your home, unless they’re a full time student. As the property owner, you’re directly responsible for council tax (check out Citizen’s Advice Bureau for more information), so if you want to cover the shortfall, factor this into your lodger’s rent.
Make sure your house is ready for a lodger
Under the government’s ‘Rent a Room’ scheme, you can earn up to £7,500 a year from a lodger without being taxed (which works out to a rent of around £144 a week). However, if you’re planning on renting a room through this scheme, the room has to come fully furnished – so make sure the room itself has everything you need.
You should also make sure you have enough kitchen equipment and enough of things like towels and bedding in the house. It’s also worth getting your gas appliances checked to make sure they’re safe.
Decide terms and conditions in advance
Think about your lifestyle, and how you imagine a having a lodger will fit into your home and your life. This is your chance to set some lodger rules and stop problems before they occur by having them be part of your terms and conditions – for example, would you allow a lodger with pets? Would you prefer that they don’t have guests come to stay more than once or twice a week? What bills will be included in the rent, and what will the lodger pay for? Ironing out these decisions ahead of time will make it easier to find a lodger who fits, and who you’ll be happy living with.
Create a lodger agreement so you’re both covered, making sure that any of the big lodger rules and terms and conditions are covered, and include details on how either you or your lodger can terminate the agreement.
First, you should look at local rents, to see what the market is like and so you can determine a fair rent for prospective lodgers. If you overprice your room, you might struggle to find a lodger – but if the price is very low, you could be inundated with requests, so it’s important to do your research and find a fair and reasonable price for renting a room in your area.
Once you’ve decided your rent, take photos of the room and of your house in general. Make sure they’re accurate and reflect the realities of living there – if you’d rather your lodger didn’t use things like your television or games console, don’t include them in your listing.
You can then start advertising that you’re renting a room, on sites like SpareRoom or GumTree, in a local paper, or even in local shops with a notice board.
Once you find a lodger, you might want to do a credit check, or ask for references. Not everyone does this, but if you’re renting to a lodger for the first time it might give you extra peace of mind.
There are plenty of pros to having a lodger in your home – the extra income is a big part of it, but there are lots of reasons why having someone else living in your house would work for you.
This is usually the main reason that homeowners decide to take on a lodger. The additional income can help support your mortgage, or just serve as a way to increase your income. If you’ve got space that’s sitting empty, renting a room will bring you extra income and help your house to pay for itself
Renting a room to a lodger can be a great way to make new friendships. Because you’ll be vetting applications, you can always look for a lodger that you’ve got plenty in common with. Of course, it doesn’t always happen, but you might end up becoming friends.
Company and safety
Some people don’t like living alone – so if you own your own home, having a lodger can make things feel a little bit less lonely. If you’re also concerned about safety, having someone else in the house can often feel safer, as will knowing that someone is there to check in on you every once in a while.
If you travel a lot, or go away on business, having a lodger that you’ve vetted and trust can be a lot easier than having to have someone house-sit for you. Knowing that there’s someone to look after your home also provides some extra security if you go on holiday.
If you take in a lodger from a different culture or a different country, you might get the opportunity to learn about their culture. You might even learn a new language or some new recipes from them, as well as having the chance to share your own culture with them. Renting a room to a lodger might give you the chance to broaden your horizons or help you learn new things.
Unlike having a housemate or flatmate, because the house is your main place of residence you can set the house rules (within reason, of course).
Having a lodger isn’t for everyone – while there are several good reasons to opt for a lodger instead of a housemate or living alone, you should be aware of the potential difficulties and issues that could ensue.
You might have to chase for rent
If your lodger doesn’t pay rent on time, you could end up with an awkward situation where you have to ask them about their payments – and since you live in the same house, there’s no separation to keep it from getting awkward.
Potential bad habits
Even if you carefully vetted your lodger, the reality of living with them might be different than you imagined. They could be messy, inconsiderate or just generally not fit in with your lifestyle, especially if they don’t help to keep shared areas clean and tidy,
Lack of privacy
If you’re used to living alone, adapting to having someone else in your home might be difficult, and having less privacy can be a difficult thing to get used to. You may have to be more careful and cautious about what you’re doing in your home.
Conflict at home
If you and your lodger disagree about something, or if there are issues in the relationship, it can cause stress and discomfort. Since your home is usually where you go to get away from stresses in the outside world, losing this sense of sanctuary can be difficult.
Having a lodger staying in your home can be a great way to make friends and have some company, as well as making some extra income if you’ve got plenty of spare room! However, it’s not a solution for everyone – so weigh up your options carefully before you take the plunge. Follow this guide and you should be in for a smooth experience – and maybe even a new friend. For more guides to finance and housing, check out the rest of the Good Move blog.