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How much rent should I charge my lodger?

Hello
I'm renting out a double room in my nice(ish) 3 bed house near Manchester to my friend. She is currently paying me, what i would class as friends rates - £200 a month including bills. But now she has a job it's time to put the rent up! How much is it reasonable to charge just for the rent (not including the bills)?
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Comments

  • poppysarah
    poppysarah Posts: 11,522 Forumite
    Dunno - do you get on well?
    £200 plus bills would make you a nice friend.

    but see what comparables are.

    What's she expecting it to go up to?
  • silvercar
    silvercar Posts: 46,865
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    Students pay 60-70 a week in a shared house plus bills. So £200 does sound generous.
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  • Where are you in Manchester? The going rate for flatshares is £350 for a room including bills for a superbly presented and equipped (dishwasher/Sky/tumble dryer) place in the centre of the city or the student areas such as Fallowfield and Burton Road. Somewhere scruffier or further out, yes, £200+

    Your great mistake was in offering 'mates rates', as this makes it very much harder to formalise things like rent increases and notice periods. If I were you, I'd have a chat over a bottle of wine and try and get together a short contract on paper (your mortgage company would probably insist on it these days. Google 'licence of occupation').
  • Incyder
    Incyder Posts: 2,016 Forumite
    edited 16 February 2011 at 11:33AM
    Really, its best to charge inclusive of bills as it gives the lodger a neat no hassle fee to remember and budget for.
    I am a lodger in an ordinary 2 bed without sky, ensuite, dishwasher, tumble drier, net access.
    I pay £70 per week (300 p.c.m) inclusive of bills and feel its fair.

    £350 inclusive, would be the most I would pay for somewhere but the place would have to be top spec and have off road parking.
  • Jowo_2
    Jowo_2 Posts: 8,308 Forumite
    How does your friend feel about the switch from mates rates to market rate? Perhaps she thinks she's doing you a favour as she's not a stranger and she contributes sociability to the property.

    It's always a problem mixing business with friendship. Friends do favours for each other, landlords don't. Minor tenant/landlord disputes can ruin personal relationships. Informality can lead to rights and obligations being affected.

    You can find out the local market rent by looking at sites like Spare Room and the Gumtree.

    Landlordzone and DirectGov have information about the Rent a room scheme whereby a live-in landlord with a lodger doesn't have to pay tax on the rental income below £4250 per year, approx £350 per month.

    Does your insurance cover having a lodger?
  • mlz1413
    mlz1413 Posts: 2,894
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    To stay with the rent-a-room scheme, so you don't have to fuss about a tax return, then you need the rent to stay under £354 per month.
  • Goleo
    Goleo Posts: 39 Forumite
    I haven't told her it is going up yet! In don't think there will be a problem in doing so either - she knows she is on 'mates rates' at the moment. The house is close to Stockport. We don't have sky (too busy to watch too much tv!), but we have a dishwasher, internet etc. I will add in the bills to whatever i decide on so it is an all inclusive monthly rent. I would just like to be getting what the rooms is worth (i.e. if I wasn't renting to a friend) without charging over the odds. I've been having a look on gumtree (thanks for that tip!) i think if i put it up to £300 that should be reasonable.
  • She may assume she gets to stay on 'mate's rates' given she will still (I assume!) be your mate?? Job or otherwise...
  • poppysarah
    poppysarah Posts: 11,522 Forumite
    I'd check your insurance too - and perhaps use that as the reason for upping the price...
  • Goleo
    Goleo Posts: 39 Forumite
    Well she would have assumed wrong! Haha! Really though she knew it would go up eventually as when she moved in she had a month free from rent and then she was temping on rubbish pay, but i still put it up to £200, now she has a proper job (and probably earns more than me - she certainly can afford to buy more clothes and wine than i can!) she should know it will be going up again. I'm not worried about telling her, if she wants to move out she can. We would still be friends and i would be glad of the space and my spare room back for visitors.
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