- Number of house owners taking in a lodger is up 89% in three years
- Some individuals are renting out rooms as a solution to afford to remain of their properties
- Average value of renting a room in Britain is £739 a month, says SpareRoom
The variety of owners taking in a lodger has jumped 89 per cent in three years, based on new knowledge.
The findings by the flatshare web site SpareRoom discovered that numbers had elevated by this quantity when evaluating January 2024 with January 2021.
It comes as the common quantity a lodger pays to hire a room elevated to £739 per 30 days on the finish of 2023, up from £658 on the finish of 2022, an increase of 12 per cent.
Room to hire: The variety of owners taking in a lodger is up 89% in three years, based on SpareRoom
It stated that January is a busy month for the location, as folks look to hire out their spare rooms to make additional earnings after the monetary pressure of the festive interval.
However, it urged that the excessive value of residing, compounded by excessive mortgage charges in 2023, means individuals are in search of methods to make extra cash to afford to remain of their properties.
With this in thoughts, it known as on the Government to extend the edge in its Rent a Room scheme.
It at present permits folks to earn as much as £7,500 a yr tax free by renting out a room of their residence, however SpareRoom needs it to up this restrict.
SpareRoom stated that this might not solely serving to struggling owners, however would additionally create desperately wanted provide within the rental market.
Matt Hutchinson of SpareRoom, stated: ‘Living prices have soared lately, and the beginning of the yr is all the time a troublesome time as folks face the monetary hangover from the vacations, alongside elevated heating prices and payments.
‘So, it is no shock the variety of owners in search of a lodger has spiked within the first week of 2024.
‘Particularly once you have a look at how a lot you’ll be able to earn by renting out your spare room.
‘You’d must work lots of hours in a second job to return near the earnings you’ll be able to earn from a lodger.’
The common value of renting a room in Britain has reached £739 a month, says SpareRoom
| Region | Average month-to-month room hire This autumn 2023 | Average month-to-month room hire This autumn 2022 | Annual change This autumn 2023 vs This autumn 2022 |
|---|---|---|---|
| East Anglia | £651 | £599 | 9% |
| East Midlands | £562 | £512 | 10% |
| North East | £533 | £494 | 8% |
| North West | £581 | £522 | 11% |
| Northern Ireland | £558 | £483 | 16% |
| Scotland | £682 | £606 | 12% |
| South East | £732 | £657 | 11% |
| South West | £649 | £593 | 9% |
| Wales | £574 | £530 | 8% |
| West Midlands | £559 | £495 | 13% |
| Yorkshire and Humberside | £555 | £507 | 9% |
| London | £1,014 | £934 | 9% |
| UK | £739 | £658 | 12% |
| UK (excl London) | £647 | £582 | 11% |
| Source: SpareRoom |
Adding to the rental provide
Mr Hutchinson added: ‘The excellent news is, all these additional rooms are actually serving to so as to add provide to the rental market, which has been in decline for a number of years.
‘If Government needs to assist each owners and struggling renters, they need to critically think about growing the tax threshold for the Rent a Room Scheme, an incentive particularly designed to encourage folks to hire out their spare rooms.
‘It’s an actual win-win coverage, and there aren’t lots of these round in the meanwhile.’
Average room rents
The newest SpareRoom UK Rental Index reveals the common hire on a room within the UK now sits at £739 a month.
However, it varies throughout the nation from £533 a month within the North East to a big £1,014 a month in London.
The Rent a Room scheme permits a house owner to set free to a lodger a furnished room of their primary residence whereas they’re residing in it and never pay any tax on the earnings, offering it doesn’t exceed £7,500 in any tax yr.
If you might be letting the room in a property you personal collectively with one other particular person, you’ll be able to earn £3,750 every.
You do not even must be the proprietor of the property to take benefit, though you will want to get permission out of your landlord if you’re the tenant.
And should you earn greater than the edge, you may have to finish a tax return and select to choose into the scheme to assert your tax-free allowance – after which pay tax on something above it.
Estate brokers agreed that growing the tax aid could be a welcome transfer for owners and renters.
North London property agent Jeremy Leaf stated: ‘It is a good suggestion to make renting a room extra engaging because the strain for rented lodging, notably final yr, was intense.
‘Supply could not meet demand with landlords leaving the sector, normally for tax and regulatory causes, in addition to excessive mortgage charges, and the online outcome was rents stored going up and up.
‘Subsequently, short-term rental platforms resembling Airbnb have grow to be rather more well-liked however they can be costly. The rent-a-room scheme provides a extra versatile method for all events so it might undoubtedly fill a niche available in the market.
‘However, it is vitally essential that regulation is strong to guard all events, in order that owners can get their properties again to themselves when they need and tenants will be completely happy that their lodging is of applicable high quality in addition to assembly well being and security requirements.’