Potentially taking in a lodger, Nationwide mortgage

Pancakesss

Good evening,

Just wondered if anyone might know the answer to this one.. I am thinking of taking in one or 2 lodgers for 6 months to help pay my car loan off, I will still be living here full time.
I have a mortgage with Nationwide, I'm just wondering what steps I need to take and if this will affect my mortgage interest rate? Or if there are any charges to pay?
I understand that I may need to pay tax f i earn over the threshold and also check my home insurance if they allow lodgers.

Many thanks in advance

nidO

Taking in a lodger doesn't affect your interest rate and there are no charges involved from Nationwide.

Technically Nationwide demand that your lodger signs a declaration form that basically acknowledges that they have no right to remain in the property should Nationwide repossess it, I don't know how much they really care though as this requirement is basically mentioned nowhere in Nationwide's documentation or website and half their staff don't even know the form exists (and the declaration doesn't really add any legal weight to anything so it's largely meaningless).

gazter

If you contact them, there is a large chance the customer service representative will misunderstand what you are intending to do and move you to a buy to let commercial rate. Banks are generally not interested in lodgers. Your insurance company will be though. You will probably find it difficult to keep any accidental cover. The property of any lodgers will not be protected for theft, and evidence of a break in will be required for any claim for loss, these seem to be the kind of clauses ive come across. Though it doesnt necessarily bump up costs.

G_M

As gazter says, beware misunderstandings by the mortgage lender between 'lodger' & 'tenant'.

Lodgers are fine I would not even risk contacting them.

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 (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (HMRC guide for tax-free income from lodgers)

AndyBSG

Also, you should check your building/contents insurance as well.

I believe most contents insurance has exclusions for lodgers.