About to rent a room to a friend

connors07

Firstly I'm not sure if I have posted this in the right place, it seemed the most suitable place, just about!

As the title says I am going to rent a room to a friend when he returns to the country from travelling. Once he is here he will effectively be unemployed but his already on the case about finding a job. I don't know how to work out what to charge him but he's a friend, not a cash cow. It would just be the two of us so I was thinking of just splitting bills down the middle.

But what else do I need to bare in mind? I've never rented a room so a total novice. I take it the council will need to be informed as I only pay single persons council tax and my house insurance provider. Is there anything else? All advice would be much appreciated.

marksoton

He'd be a lodger and yes you'd lose the 25% CT benefit.

Is the property rented or mortgaged?

connors07

Hey thanks for the reply, it's mortgaged.

[Deleted User]

Hi,

have a look here, might help.

SailorSam

I've never rented out a room, although someone has recently hinted about she could be my lodger 'cos she's looking for somewhere to live. I thought about losing the 25% i get from my Council Tax and would it be worth it.

https://www.moneyadviceservice.org.uk/en/articles/rent-a-room-scheme-how-it-works-and-tax-rules

marksoton

connors07 wrote: »

Hey thanks for the reply, it's mortgaged.

Then apart from CT you've little to worry about.

The biggest question is are you sure you can live with this person on a daily basis?

booksurr

connors07 wrote: »

Firstly I'm not sure if I have posted this in the right place, it seemed the most suitable place, just about!

As the title says I am going to rent a room to a friend when he returns to the country from travelling. Once he is here he will effectively be unemployed but his already on the case about finding a job. I don't know how to work out what to charge him but he's a friend, not a cash cow. It would just be the two of us so I was thinking of just splitting bills down the middle.

But what else do I need to bare in mind? I've never rented a room so a total novice. I take it the council will need to be informed as I only pay single persons council tax and my house insurance provider. Is there anything else? All advice would be much appreciated.

if he is "not a cash cow" then consider this...

- you would have heated the house anyway whether he was there or not so 50/50 on heating is cash cow territory

- yes he will use lights and power in his room and cooking, washing etc so 50/50 on electrics may be fair

- you WILL lose the 25% SPD on CT so you must make sure you recover that

- you can receive £7,500 per year (ie. £625pcm) as money from him without having to declare it for tax purposes (rent a room scheme as already linked to by Sailor Sam). That means whatever you charge him (allowing for your extra costs above) counts as "rent" from him. For the avoidance of doubt "rent" means everything and anything he pays you: "rent", "share of bills", "milk and coffee kitty", "toilet paper purchases", ect etc

G_M

I know it seems a bit formal with a friend but it's worth setting some ground rules. Whether these are written down or just clearly discussed agreed is up to you.

1) Most important: rent & notice. Whatever you decide to charge (good advice above) make sure it's clearly agreed, and clear what it does/does not cover.
* If you've casually said leccy is included and he then starts running an electric heater 24/7 in his room it gets embarrasing to have to complain
* charge weekly. and agree a week's notice either way. If things go wrong between you...... (yeah, I know. He's a mate....)
2) cleaning/chores
3) guests. Can he have them? in his room? in the living room? overnight? What if his girlfriend starts staying 2, 4, 6 nights a week......? Far better to set boundaries up front
4) consumables in the kitchen/bathroom. included in rent? shared kitty? keep everything seperate?

More ideas here:

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

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

See:

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)

Cakeguts

The chances are that you will fall out over this. So only do it if you are prepared to lose a friend. The rule don't rent to friends and families applies here.

csgohan4

Cakeguts wrote: »

The chances are that you will fall out over this. So only do it if you are prepared to lose a friend. The rule don't rent to friends and families applies here.

Agreed with above, only rent unless your prepared to evict them. Free Loaders the same.