Advice for taking on a "Lodger"

SuperRich

I'm in the process of buying my first property (2 bed flat). I have a friend moving to the area, originally we were going to rent a place but then my flat popped up on the market and I pounced. I am expecting to complete in about 4 weeks-ish.

So now I'm looking at taking a "lodger" instead and I want to make sure I do things by the book. I think I need to:

• Get Specialist Buildings/Contents Insurance as having a lodger would invalidate normal insurance and buildings insurance is a requirement of the mortgage
• Inform my Mortgage Provider and get permission.
• Register with HMRC for the tax free rent a room thingy.

Daft thing is the increased cost of things like insurance is based on letting a stranger into your home, and this is one of my best mates! I don't suppose they have a "He's my Fwend" box to tick do they?

Any suggestions, tips, recommendations or humorous anecdotes welcome. Anyone have any experience of this type of thing?

G_M

Get Specialist Buildings/Contents Insurance as having a lodger would invalidate normal insurance and buildings insurance is a requirement of the mortgage Unlikely. But you would not be covered for theft unles there was forced entry
Inform my Mortgage Provider and get permission.
Not usually needed for a lodger
Register with HMRC for the tax free rent a room thingy.
Yes

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (General information site)

Landlordzone (General advice on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

21 tips (Tessa Shepperson's Lodger Landlord website)

katejo

G_M wrote: »

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (General information site)

Landlordzone (General advice on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

21 tips (Tessa Shepperson's Lodger Landlord website)

no need to register with HMRC for rent a room as long as you don't have any other income to declare and so don't complete a tax return form.

buglawton

There's a £4k-sh tax free allowance on lodger income.

Talc1234

SuperRich wrote: »

I'm in the process of buying my first property (2 bed flat). I have a friend moving to the area, originally we were going to rent a place but then my flat popped up on the market and I pounced. I am expecting to complete in about 4 weeks-ish.

So now I'm looking at taking a "lodger" instead and I want to make sure I do things by the book. I think I need to:

• Get Specialist Buildings/Contents Insurance as having a lodger would invalidate normal insurance and buildings insurance is a requirement of the mortgage
• Inform my Mortgage Provider and get permission.
• Register with HMRC for the tax free rent a room thingy.

Daft thing is the increased cost of things like insurance is based on letting a stranger into your home, and this is one of my best mates! I don't suppose they have a "He's my Fwend" box to tick do they?

Any suggestions, tips, recommendations or humorous anecdotes welcome. Anyone have any experience of this type of thing?

At the very least you must inform your insurance provider or you risk your policy becoming invalid. I use a specialist insurance provider which costs me £100 more per annum than I would likely spend without a lodger. You may not be covered for theft except in the case of break-ins. Your lodger won't be covered for theft of their possessions.

You don't need to inform your mortgage provider

You don't need to inform the inland revenue. You will need to declare any income earn't above £4,250 per annum.

You will need an annual gas safety certificate.

katejo

Talc1234 wrote: »

At the very least you must inform your insurance provider or you risk your policy becoming invalid. I use a specialist insurance provider which costs me £100 more per annum than I would likely spend without a lodger. You may not be covered for theft except in the case of break-ins. Your lodger won't be covered for theft of their possessions.

You don't need to inform your mortgage provider

You don't need to inform the inland revenue. You will need to declare any income earn't above £4,250 per annum.

You will need an annual gas safety certificate.

Yes several insurers refuse to cover you with a lodger. I am currently with Direct Line and they are ok. In the past an insurer said that they would cover if you had professional lodgers but not students! Note that the £4250 includes all bills like gas & electricity and council tax. You are not allowed to charge these separately.