September 27, 2010
Thousands of UK homeowners are taking in lodgers to boost their finances amidst economic uncertainty and the number is rapid increasing, according to new studies.
Properties with lodgers have increased by 15% in the past three years. Of the 210,000 homeowners who have lodgers in the UK, 37% claim they have to rent out spare rooms because they need the money to help pay the mortgage or soften the blow of redundancies in the recession’s aftermath, a report by insurance firm LV= has found.
In addition, two thirds of respondents take in friends and acquaintances as lodgers compared to the 1960s when the majority housed strangers.
Of the 1,000 surveyed by the organisation, younger couples and those on high incomes were most likely to rent out spare rooms, bringing an average of £4,700 in welcome rental fees.
"This report shows there's been a significant surge in homeowners taking in lodgers to make ends meet, or even just to make the best use of spare space in the home,” commented LV= Home Insurance Managing Director John O’Roarke.
"Renting out a room is a good way of boosting household income and is also a good way for young people to get some extra income when they face the expense of joining the property ladder."
However, taking in lodgers does not come without problems. One in five lodgers have damaged property, according to LV= research, while one in seven lodger-lords have had problems with consistent rental payments.
Worryingly, 42% of homeowners do not know they need to inform their insurer when welcoming lodgers to ensure their cover remains valid - and only half realise they can benefit from tax breaks.
“Homeowners do need to be aware of their rights and responsibilities as a lodger-lord,” added Mr O’Roarke. “Accidents happen and problem lodgers can be a real headache, so families should always inform their insurer before they let someone move in to their property, even if they are friends.”
