8th November 2013
An estimated 1.7 million or 9 per cent of UK homeowners now have a lodger in their home, up from 6 per cent in 2011, according to research from Santander Mortgages.
The ‘rent-a-room’ trend provides UK homeowners with over £3.3 billion per year in rental payments – an average of £164 per month for each recipient.
Nearly three quarters (74 per cent) of homeowners have at least one spare room in their home that currently is either rented out or has no-one living in it, while 26 per cent have no unoccupied rooms in their house.
The research shows that there is currently a potential £38.9 billion of rental income to be made in the UK from renting out spare rooms. However 87 per cent with a spare room still choose not to rent it out.
More than a third or 35 per cent of those who rent out a spare room say they do so to help out a friend or family member. A further 11 per cent do so because they need the additional income to meet their mortgage payments and outgoings whilst 15 per cent need the money to supplement their disposable income.
A fifth of those in the North West with a spare room and 19 per cent of those in London with a spare room rent out that room. Meanwhile Britons living in the East of England are less enthusiastic about taking in a lodger at 7%.
Of the one in three or 34 per cent of homeowners with unoccupied rooms who would consider renting out their spare room, 18 per cent would do so if they needed to financially and 23 per cent would rent out the room if a friend or family member needed it. Some 11 per cent would consider it if they could find an appropriate tenant and six per cent say they would do so if they were able to make decent money from it.
The research further reveals that of those currently renting out a room, 13 per cent believe that the rental income would cover more than 50 per cent of their total mortgage payments each month. On average, respondents said that 27 per cent of their mortgage payments are covered by spare room rental income per month.
Phil Cliff, director of Santander Mortgages, said: “The ‘rent-a-room’ trend is clearly on the rise as the squeeze on the cost of living drives homeowners to look for ways to supplement their disposable income and cover their mortgage costs. There is still plenty of scope for this market to expand, as homeowners with unoccupied rooms put their property to work by renting rooms to friends, family or tenants. It is also worth bearing in mind that the UK Government’s ‘Rent a Room’ scheme enables homeowners to earn up to £4,250 per annum tax free from renting out a spare room.
“We advise that before taking this step, anyone with a mortgage should speak to their mortgage lender to ensure they stay within the terms and conditions of their mortgage agreement.”
A quarter (24 per cent) of homeowners have one room spare, 23 per cent have two rooms spare, while 19 per cent have three rooms spare in their house. Only 8 per cent have four or more unoccupied rooms in their home.