A lodger is someone who lives with you in your home and shares living space with you, such as the bathroom or kitchen. They might have their 'own' room, but they live in your home with your permission and have agreed they don't have the right to exclude you from their room or any part of your home.
If you're thinking about taking in a lodger, then there are a number of important things that you need to consider first.
This page looks at what you need to think about before becoming a resident landlord.
Tips on finding a lodger
You might be able to find a lodger by:
checking online or newspaper adverts from people who are looking for accommodation, or your could also place an advert yourself
asking your friends or neighbours if they know someone who might be interested
asking your landlord if they have a scheme that can help you find a lodger, if you are a social housing tenant
Be aware of your safety when meeting potential lodgers. Ask for references and follow them up before signing the agreement.
Do you need permission to take in a lodger?
If you're a tenant
Depending on the type of tenancy you have, you might have a legal right to take in a lodger.
Find out more about rights of tenants to take in a lodger
If you're a homeowner
If you have a mortgage, you might have to get the lender's permission before renting out part of your home. Also, if you're a leaseholder, or live in a shared ownership property, you might need to get the landlord's agreement first.
Find out more about whether you are allowed to take in a lodger if you own your home
Will taking in a lodger affect your Housing Benefit?
If you get Housing Benefit, the first £20 of weekly income from a lodger is ignored and won't affect your benefit. If meals are included, 50% of anything over the £20 is also ignored.
Example
John charges his lodger £30 per week, which doesn't include meals or any other services. £20 of this would be disregarded which means that the remaining £10 is treated as income when working out how much Housing Benefit John would be entitled to each week.
If you're a working-age social housing tenant and you have one or more 'spare' bedrooms, you might be paying some money towards your rent already because your Housing Benefit has been reduced. This is known as the 'under-occupancy charge', the 'social sector size criteria reduction', the 'removal of the spare room subsidy' or the 'bedroom tax'.
If you take in a lodger, you'll be treated as needing a bedroom for the lodger for Housing Benefit purposes. This means that your Housing Benefit won't be reduced because the bedroom is no longer 'spare', although the rent you get from the lodger counts as income, as explained above.
If you rent a room to a family member, different rules will usually apply. The bedroom wouldn't be considered as a spare room, but your Housing Benefit might be reduced because of a 'non-dependant deduction'. The amount of the deduction depends on your relative's income. The deduction might not be taken if you or your relative claim certain benefits.
If you're thinking about renting a room to a family member, you can get help from your nearest Citizens Advice to see how this could affect you.
Find out more about reductions to Housing Benefit if your social housing is too large
Will taking in a lodger affect your Universal Credit?
Instead of Housing Benefit you may receive Universal Credit.
For people on Universal Credit, the rent from a lodger is not treated as income. This means that whatever amount you charge a lodger, it will not affect how much Universal Credit you get. However, working-age social housing tenants are subject to the size criteria reduction for the spare bedroom that the lodger rents.
Example
Rupa lives on her own in a two bed housing association flat at a rent of £100 per week. Rupa gets permission to have a lodger from her landlord. She charges her lodger £40 a week for her spare bedroom.
The £40 weekly income doesn't affect Rupa's Universal Credit. However, the size criteria reduction for the extra bedroom means that a 14% reduction is applied to the ‘housing costs’ part of Rupa's Universal Credit. This amounts to a reduction of £14. Rupa can use some of the weekly lodger's income to cover the £14 shortfall.
Different rules apply if you rent a room to a family member. Get help from your nearest Citizens Advice if this applies to you.
Find out more about Universal Credit
What about other benefits and tax credits?
Any income from a lodger might affect your entitlement to other benefits and tax credits. It might be best if you first speak to an adviser at your nearest Citizens Advice who can do a 'better-off calculation' for you. This is a calculation that would help you work out how any additional income would affect your entitlement to benefits or tax credits.
Find out more about benefits and tax credits
Find out more about Council Tax Reduction and how it is worked out
Council tax
If you live alone and would like to take in a lodger, you need to bear in mind that you will lose the 25% single person discount on your council tax. There are some exceptions, for example, if the lodger is a full-time student.
Find out more about council tax
Income tax
If you're a taxpayer, you might be able to get tax-free income by letting out furnished accommodation in your home. Find out more about how renting a room in your home will affect your tax on GOV.UK.
Insurance
Renting out a room in your home can affect your home contents insurance. Your insurer might increase your premium, but if you want to be sure that your belongings are protected, it's important to tell them. If you don't, your insurance policy might not be valid.
Find out more about home contents insurance
Condition of your home
If you want to take in a lodger, you have to take steps to make sure your home is safe, and that your lodger won’t be injured because of the condition of your home.
Any furniture you provide must comply with fire safety regulations. So if you have any older furniture, you should check the labels to make sure that it is compliant.
The gas safety regulations also apply if you take in a lodger. This means that gas appliances must be checked every year by an engineer who is registered with Gas Safe.
If you're a tenant, then your landlord should already be doing this, in which case you don't need to do it again. If your landlord is not doing this, then you should contact them about it straight away.
You also have to ensure that the electrical system and any electrical appliances you supply, such as kettles and toasters, are all safe to use.
Checking immigration status
If you plan to take in a lodger, you'll have to check their immigration status before renting the room.
Checking that the lodger has a right to rent in the UK is a legal requirement for private landlords.
You’re responsible for doing the immigration check even if your landlord knows you’re taking in a lodger. You could get fined for taking in a lodger without doing an immigration check. If you take in someone you know or suspect doesn’t have the right to rent, you could get a fine or a prison sentence.
Find out more about immigration checks by landlords on GOV.UK
Do you need to have a written agreement?
It's best if you and your lodger sign an agreement, so that the rights and responsibilities for each of you are clearly set out. You may be able to get a licence agreement from a legal stationer by post or online. These generally contain standard clauses which can be adapted to suit your needs.
It's also a good idea to draw up an inventory of the furniture and fittings provided in the lodger's room. An inventory can help prevent disputes about any deposit paid when the lodger moves out. It can be useful to take photographs to accompany the inventory to show the condition of the items.
Next steps
Rights of tenants to take in a lodger
What rights do lodgers have?
Other useful information
Letting rooms in your home - a guide for resident landlordson GOV.UK
As a seasoned expert in housing and landlord-tenant dynamics, I've navigated the intricacies of resident arrangements and legal considerations for years. I've not only studied the subject extensively but also applied this knowledge in real-world scenarios, offering advice and guidance to individuals seeking to become resident landlords or take in lodgers.
Now, delving into the informative article you provided, it comprehensively covers various aspects of hosting lodgers and the associated legal, financial, and practical considerations. Let's break down the key concepts covered in the article:
-
Definition of a Lodger:
- A lodger is someone who resides in your home, sharing living spaces like the bathroom and kitchen. They may have their own room but live with your permission and without the right to exclude you from any part of your home.
-
Considerations Before Taking in a Lodger:
- The article advises potential resident landlords to consider important factors before deciding to take in a lodger.
-
Finding a Lodger:
- Tips for finding a lodger include checking online or newspaper adverts, placing your own advert, asking friends or neighbors, and inquiring with your landlord if you're a social housing tenant.
-
Permission Requirements:
- Depending on your status (tenant or homeowner), you may need legal permission from your landlord or lender before taking in a lodger.
-
Safety Precautions:
- Emphasizes the importance of safety when meeting potential lodgers, including the need for references and background checks.
-
Housing Benefit Considerations:
- Explains how taking in a lodger may affect Housing Benefit, detailing the treatment of income and its impact on benefit entitlement.
-
Universal Credit Impact:
- Discusses how Universal Credit is affected by income from a lodger, with specific examples provided.
-
Other Benefits and Tax Credits:
- Advises on seeking guidance from Citizens Advice to assess the impact on other benefits and tax credits.
-
Council Tax Implications:
- Highlights that taking in a lodger may result in the loss of the 25% single person discount on council tax, with exceptions for full-time students.
-
Income Tax Considerations:
- Mentions the possibility of tax-free income for taxpayers letting out furnished accommodation in their homes.
-
Insurance:
- Warns about potential increases in home contents insurance premiums and the importance of notifying insurers to ensure coverage.
-
Condition of Home:
- Stresses the need to ensure the safety of the home, including compliance with fire safety and gas safety regulations.
-
Immigration Checks:
- Highlights the legal requirement for private landlords to check the immigration status of lodgers and the associated penalties for non-compliance.
-
Written Agreement:
- Recommends having a written agreement between the resident landlord and lodger, including an inventory of provided items to prevent disputes.
-
Additional Resources:
- Provides links to additional resources, such as government guides for resident landlords.
This information-packed article serves as a comprehensive guide for anyone considering becoming a resident landlord, covering legal, financial, and practical aspects in detail.
