Why rent out a spare room?

LodgersAs of April 2013 the government introduced new rules which could affect your Housing Benefit. Should you have a room in your house that the government think you do not need, you could face cuts to your Housing Benefit.

Renting out your spare room may be a way to prevent this. 

How does it affect me & my benefits?

When renting a spare room, the first £20 a week you receive in rent won’t affect your benefit. Should you receive more than £20 a week in rent, the extra cash is likely to affect your benefit, however you should still end up better off.

Homeowners and tenants who rent out furnished accommodation and take in a lodger do not have to pay tax on any rent of up to £4,250 per year, and because it’s tax free it will not affect your Child Tax Credit or Working Tax Credit either.

For more information on how renting a room will affect you and your Housing Benefits, contact your Local Authority who will be able to advise you further. And visit the links below.

Guide to renting out a room

When renting out a room in your home it is important you follow a simple set of guidelines to protect you and your lodger. Make sure you read our step by step guide for information on how to do this.

To rent out a room, you will need permission from RFH first. Please contact us for written permission before allowing anyone to move into your home.

Please also make sure you check with your Local Authority to find out how and if renting a room will affect your benefit.

Step 1 – Get your house ready

Once you have spoken to the relevant authorities, it’s time to get your home ready. Start by making sure your home and the room you wish to rent are safe, secure and fire proof.

Here are some links that may help you with the initial stages of getting your house ready:

Guide to letting a room

Rent a Room Scheme

Once your house is safe and ready, advertise by putting a notice in your local shop and or use one of the many free online advertising sites to find your new lodger.

Step 2 – Finding the right person

Having someone else live in your home is a big step, so make sure you are prepared and find the right lodger.

Take the time to talk to the people viewing your property to make sure they are the right person for you and your home. Discuss any ground rules early on, so you both know what to expect and to prevent any issues arising.

Finally make sure you ask for references from their employer or previous landlord, as this will help to ensure that you have selected the right person. 

Step 3 – Get it in writing

It is important to have a written agreement between you and your lodger, as it will help protect you and your lodger should anything go wrong.

The agreement should include:

  • Rent amount and payment details
  • Which rooms/facilities the lodger is entitled to use
  • Services you agree to provide
  • Any share of household bills
  • How long until the payment amount is reviewed
  • Length of lodging and notice period
  • House rules

If you would like to discuss any of the above please contact your Housing Officer.