question on letting rooms to lodgers

want2bmortgage3

hi all

what is the deal with renting out rooms in a property? let me explain, i have a 2 bedroom flat and i want to let out the rooms to friends that claim shared room allowance.

is there a limit to how many people can occupy a 2 bedroom flat? would 2 people in a bedroom be allowed? what about if the lounge was used for one person also?

i'm not trying to take the mick here, i just want to know the rules, before deciding whether to suggest the idea to my mates. it would be good for me as an alternative income to my job, which i would be declaring for tax obviously.

last thing, i want them to be seen as lodgers, so that there is no fixed tenancy agreement and they have fewer rights than a 'proper' tenant when it came to wanting the property back again.

thanks

00ec25

want2bmortgage3 wrote: »

what is the deal with renting out rooms in a property? let me explain, i have a 2 bedroom flat and i want to let out the rooms to friends that claim shared room allowance.

is there a limit to how many people can occupy a 2 bedroom flat? would 2 people in a bedroom be allowed? what about if the lounge was used for one person also?

shared room allowance does not mean they have to share a room! it means the rates assumes they share a property
there are no rules about using a lounge as a bedroom
there are no rules about sharing a room, obviously will limit its appeal to most normal people though

be careful about your relationship - because they are your "mates" now but you are entering a business relationship so having one that is so heavily biased in your favour could result in falling out if resentment grows over the fact you are clearly intending to exploit them by packing them into one room

if you convert the lounge its hardly a home any more then is it? Its just 3 bedsits

want2bmortgage3 wrote: »

last thing, i want them to be seen as lodgers, so that there is no fixed tenancy agreement and they have fewer rights than a 'proper' tenant when it came to wanting the property back again.

its unclear from your idea if you will actually be living there? If not then they cannot ever be lodgers, if you are then they can only be lodgers. There is no "seeing" to it, only the legal realities of the actual arrangement

if you do end up with you plus 2 lodgers then check with the council what its rules are over HMO. With 3 separate households in a property you are over the limit for selective licensing so its down to your own council if they require that

dimbo61

If the 2 lodgers are related or a couple then its not HMO
You need to be living in the property for them to be lodgers and not tenants.
You can use the "rent - a -room" scheme to offset tax you need to pay on profit from renting when you fill in your TAX return.
You would need to get a gas safe certificate and may need to inform your insurance.
Can you sublet ? you live in a flat ?

want2bmortgage3

hi, just to clarify, i will be living there in the small bedroom. i am considering 2 lodgers in the big bedroom (couple) and possibly one more lodger in the lounge, if it is possible. then basically we would just use the kitchen as a communal area and not have a lounge. would that be possible?

marathonic

want2bmortgage3 wrote: »

hi, just to clarify, i will be living there in the small bedroom. i am considering 2 lodgers in the big bedroom (couple) and possibly one more lodger in the lounge, if it is possible. then basically we would just use the kitchen as a communal area and not have a lounge. would that be possible?

It should be possible - but you're unlikely to get the rates that people in your area would get for rooms in homes with a shared lounge. Also, you won't be charging per lodger, it'll be per room, i.e. don't expect to get double the rate for a double room when compared to what you'd get for a single room.

want2bmortgage3

the rate they each get is £325 per month. my next question is do you include bills in a lodgers price? If I rented out the whole flat I'd get about £800 a month but they would pay the bills. If I live there and receive £975 from lodgers then I'd be happy to include the bills, and I guess it would be less complicated as well?

SternMusik

want2bmortgage3 wrote: »

the rate they each get is £325 per month. my next question is do you include bills in a lodgers price? If I rented out the whole flat I'd get about £800 a month but they would pay the bills. If I live there and receive £975 from lodgers then I'd be happy to include the bills, and I guess it would be less complicated as well?

Are you saying you want to charge the couple £650 to live in a room in a shared flat with no lounge, one bathroom and two other people living there?? I can't see you getting much interest to be honest.

Bills are normally included and they should reflect whether it is a couple or a single person. Say you chage £325 per room for a single person and £375 for a couple taking into account bills. Council tax will be your responsibility too.

SternMusik

Also, when you say that you'd get £800 if you were to let out the whole flat you are comparing apples with pears. A tenant has exclusive use of the place and much better rights than a lodger. Most importantly you would have to find somewhere else to live.

SternMusik

The tax implications of renting out rooms in your home are explained here: https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

want2bmortgage3

I see my figures were a bit extortionate there, and that lodging is a lot different to a tenancy! So if I was to ask say £400 for the double room between 2 people. Then £250 for the lounge room would that be more acceptable? Then I would deal with all the bills myself.

I_have_spoken

OP, the obvious question is why? Can't you service the mortgage?

But you'll certainly find recent immigrants willing to live like that, in fact working on 12hr shifts, 4 could have the big room and 'hot bunk'.