Is it legal mortgaged house + friend staying with me and paying me a rent?

toja

Hi everyone. I just bought my first house and moving in soon. I have a good friend who just had a baby and is being chased out by her landlord, as the landlord does not want a child there. My friend has applied for council flat but apparently it takes ages to get any response. Her chances to get another rented place is limited because she is on maternity leave with limited funds. I have offered her to stay in one of my new house's rooms until she sorts out her things - of course, she would pay me some rent. This could take 6 months - 1 year - 2 years - who knows, but it would not bother me because she is a friend of mine. This would be beneficial for me too, her rent would ease my financial burden a little, and we could share a childcare.
My question is, would I be doing something legally wrong? Do I need to tell my bank? Tax people? I hate to think that this little mutual support can turn out to be called a "letting business" which I don't think is fair. Any opinions please.

real1314

Unlikely to be a problem - your friend aquires no tenancy rights as logn as you are there too and she is just renting a room, so your mortgage company is unlikely to be an issue.

As for tax, the "rent a room scheme" allows about £4000 a year to be received tax free -you can check this on direct.gov.uk

toja

real1314 wrote: »

Unlikely to be a problem - your friend aquires no tenancy rights as logn as you are there too and she is just renting a room, so your mortgage company is unlikely to be an issue.

As for tax, the "rent a room scheme" allows about £4000 a year to be received tax free -you can check this on direct.gov.uk

Thanks, very useful, exactly what I needed. The rent would be below £4000 a year and I am not signing an agreement with her (just discussing verbally), I am living in the house myself... good to hear I am not doing anything wrong!

Fire_Fox

You should have some sort of written agreement in place to protect both parties - who pays the bills for example?

wreck_fisher

You should also give your friend a rent book as if she's there a long time and you fall out or want her to move out it could be seen as if she is contributing to the mortgage.

Jowo_2

Check if you need permission from your mortgage lender and insurer.

Do get a lodgers agreement set up with your friend as this will prevent any misunderstandings around the basics, such as rent, bills, notice period and so forth. Though its understandable that you may prefer to keep it informal, this can backfire.

Consider setting up basic house rules, too, to cover things like smoking in the house (by lodger or their guests) and policy for overnight guests, for example.

Be realistic about the arrangment - lodger/landlady relationships can impact personal relationships. Minor domestic disputes can spoil a friendship. There are few of my friends that I would either live with - they are great socially but are bad with their money, untidy, their lifestyle very different from mine and so on which doesn't affect us in the pub but would be hard to avoid in the same house.

http://www.landlordzone.co.uk/lodgers_rent-a-room.htm
http://www.landlordzone.co.uk/lodgers_questions_%26_answers.htm

toja

Thank you to everyone. I think my question has been answered. I understand the risk of spoiling friendship but I know my friend for so long that she could be my sister, and also she has a houseshare experience and, as far as I am concerned, never caused any problems. We will rather keep it informal, but set up few rules, this is necessary to avoid misunderstandings. Thanks.