Renting out all or part of your home
Renting out a room
There is a shortage of decent housing in the UK, to encourage people who own homes to rent out their spare rooms the government has developed the "rent a room scheme" (GOV.UK website). Any income received under the scheme is tax free so long as you:
- Live in the same property as your lodger
- The room you rent out is furnished
- The rent you receive is not more than £4,250 per year (which works out at £81.73 a week for a year)
You can choose not to join the scheme and can pay tax on all the rent and then claim certain expenses (such as agent’s fees, repairs and gas/water bills). More information is available from a number of organisations including Shelter, which has detailed information about sharing your home and taking in lodgers on the sharing and subletting page (Shelter.org.uk) of their website. For further information in Warrington, contact housingplus.
Renting out your home
If you decide to rent out your home you need to understand all of the responsibilities that you will take on as a landlord. These include:
- keeping your property in good repair and free from hazards
- you need to make sure that all electrical and gas appliances you supply are safely installed and maintained
- any furniture provided may need to comply with the safety regulations
- you will need to provide an Energy Performance Certificate for the property
- any deposit that you take must be protected in a government-approved scheme.
You may also need to get permission from your mortgage lender to use the property in this way and you will be liable for tax on the income received, although some expenses can be offset against this. More information is available on the GOV.UK website.
You are advised to formalise your agreement and have a written contract between you and your tenant, which should set down the legal terms and conditions of the tenancy. Further information about the various types of tenancy is also available from the GOV.UK website or from housingplus.