9:25 AM, 10th February 2014, About 8 years ago 19
According to SpareRoom.co.uk there are around 15 million spare rooms in the UK.
Letting just 10% of these could go a long way towards solving the UK housing crisis.
Against this backdrop I was delighted to read today that housing charity Shelter are supporting a campaign by SpareRoom.co.uk to increase the “Rent A Room” tax breaks which have not changed since 1997. Currently, tenants and homeowners get the first £4,250 a year from renting a room in their own home tax free. The proposal is to increase this figure to £7,500 which makes a lot of sense given the housing crisis we are in.
The threshold is now almost £1,350 below the average room rent in the UK, which stands at £5,593 per year, and a staggering £3,417 under the average London room rent.
If the tax free allowance had risen in line with inflation it would now be at least £6,500 – still considerably below average London room rents. Since 1997, room rents have more than doubled (103%).
Unsurprisingly, there are now no areas of the capital with average rents of less than £4,250 per year – or £354 per month – while just a third (33%) of rooms across the rest of the UK are below this limit. You’d have to go back to 2009 to find a London postcode district with average rents of under £4,250 per year – and that was only one area, E12, according to SpareRoom’s data.
For at least a decade Shelter have alienated the PRS with their anti-landlord propoganda, their rogue landlords campaign and the creation and enforcement of legislation in Scotland, much of which has proven to be pointless even by their own admission. The support of the “Raise the Roof” campaign is certainly a step in the right direction for the charity but they need to do a lot more in order to win the hearts and minds of the PRS in my opinion.
Matt Hutchinson, director of SpareRoom.co.uk comments: “We’re in the middle of a massive housing crisis in the UK with house prices and rents becoming unaffordable. Everyone agrees we need to build more but we also need to be clever about how we use existing stock.
“Homeowners are sitting on an estimated 15 million spare bedrooms in England alone2. Encouraging them to let those rooms by raising the Rent A Room Scheme threshold will not only help them cope better with the cost of living crisis, but will also go some way to solving the supply issue.
“The current threshold discourages people from letting rooms because they’ll have to spend time filling out tax returns. Increasing the Rent A Room limit to reflect the market will act as an incentive to many cash-strapped homeowners, while reducing the pressure on the hyper competitive rental market within the capital and across the UK.”
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