Letting a room at home
Do you have a spare room in your home and need extra cash? Have you ever thought of becoming a resident landlord? You may be able to earn £7,500 per year tax-free under the rent a room scheme.
Check out HMRC tax guidance on this before starting...
Residential landlords or landladies have responsibilities. You should think about the implications of these before you decide to go ahead.
- Even though the tenant may only be renting a single room and sharing the space where you live, as their land lord or land lady, you still have responsibility for ensuring your home is a safe place for them to live.
- Make sure a gas safe registered engineer checks any flues and appliances every year and any repairs are carried out by a gas safe registered engineer. You must give a copy of an annual gas safety certificate to the tenant before they move in and within 28 days if the renewal check is carried out during their tenancy.
- Any electrical appliances that you supply as well as the house electrical system must be safe. This includes items such as kettles, fridges, cookers and hoovers. Mobile appliances can be PAT tested and for house wiring you could get it checked by appointing a registered electrician to do an electrical report. Whilst this is not a legal requirement it is a sensible precaution if it has been a while since your property’s electrics were checked. Registered electricians must be used if any electrical repairs are carried out on your home and make sure you keep the relevant certificates.
- Don’t forget fire safety. Smoke alarms and carbon monoxide detectors must be installed in the correct places. Sometimes your local fire services will visit your home to give you advice about how many devices to install and where to put them. Keep clutter away from escape routes and take care that any furniture complies with the latest fire safety regulations.
- If lodger lives in your home and shares communal living space with either you or a member of your family you need only give them one rental period’s notice the tenancy is ending. Communal living space would be areas such as the kitchen, bathroom or sitting room. So if they pay weekly the notice period can be as little as a week, if they pay monthly it could be a month’s notice. Whilst it is not a requirement for you to give the notice in writing, to avoid any doubt it is advisable to do so.
- It is not a legal requirement to have a written contract with a lodger who shares a communal area with you or a member of your family but is a sensible precaution to do so because a licence or contract will set out your responsibilities as a landlord or landlady and together with those of your tenant. It is possible to find these on line or at a stationers.
- Checking your tenant has a right to rent is your responsibility. The citizen’s advice bureau has some useful information on this https://www.citizensadvice.org.uk/housing/renting-privately/private-rent... . You must also check the tenant’s immigration status, fines can be up to £3000 if you fail to carry out reasonable checks.
- Your house insurance could be invalidated if you fail to tell your house insurers about your lodger. It may affect the premium so you must contact them and find out.
Take time to ask about council tax, tax credits and benefits because these could be affected too. If you are a tenant check your contract and seek permission from your landlord before renting out a room. Similarly home owners with a mortgage should obtain agreement from their mortgage company.