We have put together a comprehensive guide if you are interested in renting out a spare room.
I would like to rent out my spare room
Subletting is when you rent part or the whole of your home to someone.
You are not allowed to sublet the whole of your home under any circumstance. This means you cannot move out and let your home to someone else. If you sublet the whole of your home you will lose your tenancy. Before you sublet a room in your home or take in lodger while you are living there, you must obtain Aragon’s written permission. Please see our contact us page for our address.
I am on benefits, how will renting out my spare room affect my benefits?
As your bedroom will be occupied it is no longer considered a ‘spare’ bedroom for Housing Benefit.
The first £20.00 of the weekly income from a lodger is ignored and won’t affect your Housing Benefit. If you receive more than £20.00 a week in rent, this extra money will reduce your award.
If you get income-based Jobseeker’s Allowance (IB-JSA), Income Support (IS), Income Related Employment and Support Allowance (IR-ESA) or Pension Credit (PC), the above rules apply to these claims instead of your Housing Benefit.
The same rules will also likely apply to any help you get with Council Tax (but rules may differ between local authorities).
For Universal Credit the rules are different: you are still treated as having a spare room even though a lodger is living there. However, any income you get from your lodger is not taken into account and does not reduce your award.
Homeowners and tenants who let furnished accommodation and take in a lodger are exempt from paying tax on the rental income of up to £7,500 a year – and because it is tax free it doesn’t affect Child Tax Credit or Working Tax Credit.
Here are four key areas to consider when renting out a room in your home.
1 – Get your house ready
- Make sure your house and the room you want to rent out is safe, fire proof and general safety is sorted.
- Check your tenancy agreement and then contact Aragon Housing Association, as you usually need permission first.
- Carry out a benefits check to find out what the impact on your benefits will be.
- Talk to our benefits team if you need advice.
- Put a notice up in your local shop or social networking site.
- Put an advert on websites such as:
3 – Find the right person
- Take time to talk to the people viewing your property to make sure they are a good fit for your home.
- Check the benefit rules about renting to a relative as there are specific rules about this.
- Lay down simple ground rules early, so you both know what to expect.
- Ask for references from an employer or previous landlord.
- Make sure you carry out a right to rent immigration check. For more information about this see https://www.gov.uk/check-tenant-right-to-rent-documents/who-to-check
4 – Get it in writing
Have a formal written agreement between you and your lodger which you should both sign and agree. This should cover:
- rent amount, how often and how it is to be paid
- which rooms/facilities the lodger is entitled to use
- services you as a landlord agree to or previous landlord provide
- any share of household bills
- how long until the amount is reviewed
- house rules
- what happens if they don’t pay the rent
- notice period (to give up the room).
- Have a friend or relative with you when showing new lodgers around. If you are alone consider arranging a call/text messaging system with a friend/relative.
- Keep valuables locked away.
- Make sure you ask lots of questions especially any areas of concern.
www.suzylamplugh.org is a useful website with plenty of information about staying safe in your home.
For further information on renting out a room go to www.landlordzone.co.uk