Raise the Roof – Are Shelter listening to landlords at long last?

I have looked at the issue of renting out rooms and there are problems with any scheme. For example I suspect that there would be some discomfort in renting out a room to a person whose background is largely unknown and could be potentially dangerous if the owner of the property were an elderly single person for example. Also renting out a room to a complete stranger could be a problem with house insurance should the tenant walk off with half the contents of the house or cause serious damage. This insurance situation also happens when fostering children. Not issues that are well known. Also to think about is what happens if the tenant decides not to pay any rent. The atmosphere in the property would become very acrimonious and intimidation a possibility.

Sounds great in theory but could be difficult in practice irrespective of legislation because this isn't a separate property where difficulties are at arm's length - this is the home where a difficult situation is greatly more personal and immediate. Or have these problems been solved since I last looked at it?

Reply to the comment left by "Dennis Stephenson" at "10/02/2014 - 10:36":

Hi Dennis

The risks you have highlighted are always going to exist if a person has a stranger living in their home. There are, of course, ways to minimise these risks.

Websites such as SpareRoom.co.uk, lodgers.com, easyroommate.co.uk etc. would not exist if there was no market for this.

There is some useful information and a guide to due diligence available via this article if you would like to learn more >>> http://www.property118.com/live-in-landlords-survey-results/34460/
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Should there also be a “benefits” break when someone on benefits rents out a room?

I think along with a higher limit, only 1 room should be allowed to be rented out under the scheme and the room should not be allowed to have its own cooking facilities.

Gosh thank goodness not everyone thinks the same way as Dennis or there'd be an even worse housing crisis than there already is! Hundreds of thousands of homeowners already find that renting out a room in their home is beneficial, not just in terms of income (helping them with rising bills, cost of living and potentially also to remain in their home if they're struggling to meet their mortgage payments) but also in other ways - combatting loneliness, having someone around to water the plants, feed their pets, mow the lawn, being handy around the house - the benefits can be immeasurable. Of course it's not for everyone, but we've been helping people rent out spare rooms in their homes for over tens years, and our team is on hand to talk people through the process and understand what they can do to minimise risk. And yes, there are insurance policies available which cover you for the risks of having a lodger, which we can recommend to people thinking of doing so.

If the lodger (not a tenant - they don't have an AST or a right to exclusive use of the room) fails to pay their rent they can be simply asked to leave, and the homeowner can change the locks and call the police if they're worried that they may cause trouble. There's more information on how to take steps to protect yourself on our website, as well as how to prepare for taking in a lodger and what your responsibilities are as a landlord. http://www.spareroom.co.uk/content/info-landlords/advice-landlord/

Mark

Perhaps at the same time you could persuade George Osborne to raise the benegfits in kind tax level for employees which was at £8500 when I left NBS in 1994 and had been at that level for the 10 years at least before that.

It won't happen - and neither will an increase in the rent a room tax allowance, it is just left to wither on the vine.

Reply to the comment left by "Industry Observer " at "10/02/2014 - 12:12":

"Raise the Roof" is not my campaign, but I am more optimistic than you, even though I'm unlikely to ever use the "Rent A Room" scheme and despite that fact that at least in theory it could impact the markets I do operate in.
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As has been suggested in the previous posts, the biggest barrier to letting out spare rooms is stranger danger - however, the way around this is the same as for any landlord - due diligence, careful interviewing and running a thorough tenant verification check with a reliable company. Agreeing reasonable house rules, while accepting that the lodger needs to treat the place as home is also crucial too. However, when I was doing my research for my lodger website I soon came to realise that lodger landlords often don't do any of this - least of all the check. A lot of them simply let to friends, without properly considering the pros and cons, and many friendships have ended this way.
On the subject of insurance, some home insurers will allow lodgers (if they're of good character) but if they don't, I know of at least two insurers with specialised products - google "insurance with lodger".
Someone mentioned letting a room and benefits - the government were proposing to allow public housing tenants to take in lodgers and keep their benefits, but this was only going to be with the roll out of universal credit. As it currently stands, the first £20 per week is disregarded, more if they provide meals, laundry etc.
While the Raise the Roof campaign is a good idea and I have signed the petition, there is a common misconception among lodger landlords about how this works - as it's called a "scheme" they think they have to apply to HMRC to join, To clarify this for resident landlords, there is a rent a room ready reckoner tool on my site.

Just realistic Mark the money has to come from the Budget somewhere and it just ain't there.

In response to Dennis I missed his later points.

Lodgers are outside the normal tenant and licencee provisions, 1977 PFE Act etc and so after a written request to leave you can basically just put their belongings outside and change locks.

You might need to give them a week not certain think you do but after that they can come back to find their personal efects outside the front door.

Reply to the comment left by "Industry Observer " at "10/02/2014 - 12:30":

While lodgers are excluded occupiers under the Protection from Eviction Act 1977, a lodger is still entitled to what the law calls "reasonable notice" to quit. In an absolute extreme situation where for example, the lodger is violent, the agreement can be terminated immediately, otherwise notice should be given - for obvious reasons, this should be written but it isn't a legal requirement. The notice period depends on the agreement - if it's for a fixed term, as with an AST, you could only serve notice for a breach - such as rent arrears, damage or breaking a house rule. Outside a fixed term, again as with an AST, notice is as per how often rent is paid. A lodger should never be excluded until the notice period is up and the agreement terminated.
However, in practice, a large number of lodger agreements are very informal, even beneath the radar affairs, and the line between someone simply staying as a guest and a lodger is blurred (a bare licensee as opposed to a licensee). Even where the lodger is a licensee, the agreement is often verbal (this is perfectly legal but bad practice). This naturally makes things very messy if the lodger needs to be evicted.

I have a comment, then a question:

Since the tax allowance is £4,250 and this does not have to be declared anywhere on any tax return,
I would think alot of landlords with more than this amount coming in, or having two lodgers, would just take the extra money in cash and not declare it at all.
- I know not of having to declare the number of lodgers one has.

I was told, by my accountant, that if one is a landlord of let properties, one cannot then participate in the 'rent-a-room' scheme.
- Is this correct ?