Take in a lodger... official MoneySavingExpert.com discussion

lizzywat

not sure if i am doing this right as this is the first time i have joined a forum. I am thinking of taking in a lodger, can they be getting housing benefit?

PasturesNew

lizzywat wrote: »

not sure if i am doing this right as this is the first time i have joined a forum. I am thinking of taking in a lodger, can they be getting housing benefit?

Would the lodger have any relationship to you at all? If so, what relationship? Or will you be advertising for a complete stranger?

huggermugger

lizzywat wrote: »

not sure if i am doing this right as this is the first time i have joined a forum. I am thinking of taking in a lodger, can they be getting housing benefit?

The short answer is yes but it's not straightforward... one of the things to consider is that there is a recommended rent set for most areas, above which HB will not pay and that's not always the market rent. I have seen a copy of the one for this area so you or your prospective tenant could ask for a copy.

Another is that HB are notoriously slow at deciding claims and paying out. They also only pay rent in arrears, not in advance. And if your tenant moves out without any notice, they won't pay the month's notice. As far as I know, they don't pay deposits either, though there may be a system for dealing with that.

Another consideration is that HB will no longer pay rent direct to a landlord (at least in this area), it has to be paid to the tenant who then banks the cheque, waits for it to clear & then pays it to the landlord. Landlords have no doubt abused the direct payment system in the past but for a lot of people it made things a lot easier.

Also, deductions can be made from what used to be called the "allowable rent" if certain things are all inclusive. The tenant is supposed to make up any shortfall themselves. Not sure exactly what those deductions are & how they are decided but maybe someone else will help with that?

I'm trying to think of some positives - umm - in theory at least it's a reliable income??? It's awful really because there are so many people who need to claim Housing Benefit (me included, in the past) but the system is extremely cumbersome and complicated.
HTH

huggermugger

lizzywat wrote: »

not sure if i am doing this right as this is the first time i have joined a forum. I am thinking of taking in a lodger, can they be getting housing benefit?

By the way, welcome & you're doing it exactly right! But if you do need any help with understanding the mechanics, just ask; we all remember being newbies...

Badger_Lady

Here's how I do it!

I chose a house that's popular anyway - close to main railway station and shops/bars, large period house with plenty of living space, although it's only got one bathroom and no shower. I put in a small home gym and a pool table, and set up wireless broadband. I don't provide TVs in bedrooms - there's one in the shared living room and one in my own living room.

When I advertise, I go on all the free listings sites (gumtree etc), but I find https://www.spareroom.co.uk the most effective - takes 7 days before people can contact you for free, but by the time that's passed I usually have them queuing up round the block

I meet the potential lodgers and try to get a good conversation with them and the existing lodgers as applicable. I ask them to complete an application form with employment details, income, previous address and references. Then me and the existing lodgers will agree on who to choose. I'll call at least one reference, pretty much just to confirm they are who they say they are!

The lodgers are asked to sign an inventory and a one-month rolling houseshare agreement (so either party can terminate with one month notice). They need to pay £100 deposit to secure the room, then pay their rent (£300-£320 per month all inclusive) in advance. We each get a copy of the contract.

I pay a cleaner to visit once a week to save on arguments (I'm the messiest of the lot), and I treat everyone like housemates rather than lodgers. If I want to make a significant change to the household, like getting a pet or changing a room around, I'll ask them first. They never disagree with me and they feel included and at home. We also have regular "film nights" where we stick a couple of DVDs on and eat Chinese food

I fill out a yearly tax return because I usually have two lodgers at a time and that exceeds the "rent a room" allowance. I figure out the best way of doing the figures after a full year, because it depends how many gaps I've had between lodgers.

Caroline2CV

My preference is to take mature final year full-time overseas students. It is essential to have clear communication and to respect the person you are sharing with. I have met some lovely people and

Rent wise - when they are away for any vacations or field trips then I reduce the rent by 50% as the utility bills are reduced.

I hope the following will help -apologies if some of it has already been posted

1. Got a Mortgage?
Check with your provider that you can have a lodger

2. Council Tax 25% (Single Person's discount)

If you are a single Resident Landlord/lady check with your council how to keep the single Peron's discount.

Full-time students meet this criteria. Each year (usually mid Oct for my local University) the F/T student requests a 'Certificate of Council Tax Exemption'. I borrow this from my student and provide a copy of it to my local council.

If they stay on after the exemption cert has expired you can ask them to pay towards the Council Tax but keep a separate note of those payments via documents. Payments towards Council Tax is not income.

Your local council is likely to send you a revised Account after the Exemption cert expiry date for 100% and you may need to re apply for the 25% discount again if the student has left.

3. Licence Agreement (draw up by a solicitor)

Well worth the inital outlay - it protects yourself and your lodger. Renting out a room is 'not a shorthold tenancy'. Never call it a 'Contract'

Also include a full inventory, a list of regulations, all costs for replacing locks if 'set of keys' get lost, licence fee to be paid for their own TV.

4. Free advertising on University website

Get/read and comply with the student's accommodation office application form. Essential that you check the room's fabric & furnishings and any electrical/gas contents comply with the appropriate regulations etc.

5. When to setup the 'Free advert' for a University student/Contact details

3 weeks before Uni starts I take my application form to University Accommodation Office along with a copy of the yearly Landlord's Gas Safety Certificate (requested at the same time the boiler is serviced). I ask them to check it over before I leave - saves time if they have any points to raise.

NB The Safety Certificate provides a copy for the Lodger - I request to keep it in case they move on before its expiry and it goes off with him/her!

The advert goes on the Uni website for 2 weeks - you need to contact the Uni if you want it renewed.

I request contact by applicants is made by email. Otherwise ringing mobiles that are on 'voicemail' can cost.

6. Insurance - Contents

Saga Insurance so far have (a) never increased my Contents insurance premiums because I have taken in a Lodger (b) continue to let me have Accidental Damage

Halifax Contents Insurance immediately cancelled my Accidental Damage when I rung them up to enquire what my options were/did I need to pay an increased premium as I had just taken in student.

Each year I send Saga a letter with an Insurance Declaration form that each student has completed and signed.

Do put a lock on the lodger's room door so they can apply for insurance. There are firms for Students to insure their own items.

7. Folder - Copies of instruction manuals

Make up a file with plastic wallets. Put in it a copy of the manual for each item of electrical or gas product/equipment.

Remember to update it if you replace an item e.g. a new iron

8. Safety precautions

Smoke Alarms - I use Fire Angel type (need no batteries) They recharge when I switch on the light

Carbon Monoxide detectors - 1 in kitchen (cooker) 1 in room with boiler
NB My Corgi Engineer tests them each yr

Smoke Blanket & Fire Extinguisher - in kitchen near door

First aid Kit - in Bathroom

In addition to above I asked my local Fire Brigade to come and do a home safety check/give advice on how to safely evacuate if there was a fire.

In London it is free and they also provided me with a free smoke alarm (10 yr battery) for my loft hatch door. You also get feedback in writing. I have added a copy of their feedback to the folder (7 above)

NB The 10 yr battery in the Fire Brigade alarm was faulty a few months later and they changed it for me.

9. Lodgers v loss of privacy

I have found that if there is a mutually compatible mature Final Year Student applicant then offer the room to him/her. They leave May/June (depending on their course) and you have the room free until end of September to use the room for family/visitors etc.

10. End of let - Inventory & items to be returned

Make a list of what they have to return to you (if may be more than keys)

Carry out a full inventory check with them.

Return their deposit (less (a) any damages (b) end of let cleaning expenses agreed - both clearly covered in the Licence

11 Personal security

I have a locked room with a locked wall cupboard for my personal papers etc.

Good luck!

sarahemmm

huggermugger wrote: »

Sarah, your house sounds lovely!

Can't help with Staines, I'm afraid, tho I may have a vacancy here in Newbury... this thread could be more useful than I'd realised...:D

Thank you! I certainly think it is - but not everyone would agree;)

jeremy.felix6

I used to take in lodgers nearly 20 years ago and if I remember rightly the allowed earnings are the same now as they were today - why have they not risen to keep up with inflation? And what would they be now if they had? Should all you landlords be lobbying the government on this? Perhaps it would also take pressure off some of the ridiculous perceived 'need' to build some of those extra millions of dwellings?

Caroline2CV

Jeremy.felix6

Welcome to you - I am sure you will benefit from the generousity of the other users who also willingly sharing their ideas & suggestions.

I_Simonius

nikkie wrote: »

I have been both a lodger and a landlord so decided i'd have a go at maybe parting with some advice! hope this helps someone!

Finding housemates- the long run.

N xx.

thanks for that excellent info:T