Renting out a room
To encourage people who own homes to rent out their spare rooms, the government has developed the rent a room scheme. Any income received under the scheme is tax free as 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).
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
- ensuring all electrical and gas appliances you supply are safely installed and maintained
- providing an Energy Performance Certificate for the property
- protected deposits in a government-approved scheme.
You may also need to get permission from your mortgage lender to use the property in this way. You should have a written contract between you and your tenant, which sets out the legal terms and conditions of the tenancy.
Financial assistance for landlords
The Housing Renewals Policy is currently under review and the only funding available at this time is a Vacant Homes Loan to assist owners of empty properties to bring them back into use in the private rented sector.
Under certain circumstances, the council may be able to offer Landlord Renewals Assistance – Tenanted Properties, where a tenanted property is in very poor condition and where there rent paid is significantly lower than market rent. These are likely to be regulated tenancies where the tenancy started before 15 January 1989.