Renting out my room - How much to charge lodger?

Savingforahouse123

I've recently bought my first house... a 3 bed semi detached house with a large garden and parking near Newcastle for the bargain price of £168k.

I'd rent out either the master bedroom (double) with an ensuite

Or the second bedroom (double) with a bathroom next to it but not an ensuite

I would only rent out one bedroom and I'd take the other room but I don't mind which way I do it / who has which room.

Are there any good ways to get a ballpark figure on what to charge? I've had a look on Spareroom.com and there's no properties near mine to use as a guide price.

I'm considering £500pm for the double ensuite or £450 for the second bedroom

FreeBear

Depending on exactly where you are in the Newcastle area, £500-600 per month (bills included) seems to be the typical going rate.

If this is your first foray into having a lodger, there are a few pitfalls to be careful of.

• Do not ever use the words tenant or tenancy in any communications or agreements.
• Do not have locks fitted to the bedroom door (thumb latch internally is OK).
• Ensure it is furnished.
• Specify that access is required from time to time (e.g. for safety checks).
• If bills are included, specify "reasonable usage" so that there is scope to increase rent if energy consumption goes up.
• Do not commit to a fixed term, and have clauses that allow for termination of contract if things turn sour.
• Decide on "house rules" and make them part of the lodger's agreement.
  

Remember, this is your home, and you do not want to create a tenancy along with all the legal protections that would come with it. Lodgers should be easy to kick out should the need ever arise.

youth_leader

My daughter had a room in Jesmond and paid £450 pcm, but it was a large house with about six bedrooms. 

My choice would be to have the bedroom with the ensuite for myself, and leave your other bathroom for your lodger and guests you have round.

I think I'd also specify no overnight guests without prior arrangement with you, a poster's lodger has had his pregnant girlfriend staying overnight regularly.  

Savingforahouse123

FreeBear said:

Depending on exactly where you are in the Newcastle area, £500-600 per month (bills included) seems to be the typical going rate.

If this is your first foray into having a lodger, there are a few pitfalls to be careful of.

• Do not ever use the words tenant or tenancy in any communications or agreements.
• Do not have locks fitted to the bedroom door (thumb latch internally is OK).
• Ensure it is furnished.
• Specify that access is required from time to time (e.g. for safety checks).
• If bills are included, specify "reasonable usage" so that there is scope to increase rent if energy consumption goes up.
• Do not commit to a fixed term, and have clauses that allow for termination of contract if things turn sour.
• Decide on "house rules" and make them part of the lodger's agreement.
  

Remember, this is your home, and you do not want to create a tenancy along with all the legal protections that would come with it. Lodgers should be easy to kick out should the need ever arise.

Thank you. It's Rowlands Gill direction so 20 mins or so south of Newcastle in the countryside. £500-600 seems a bit steep as I was going to just ask the person to pay rent in one amount to me each month rather than asking for bills money on top (I'd factor bills into the price I charge them).  When you said 500-600 did you mean with or without bills as that seems pretty high already!

I'm in a house share at the moment. My housemate owns the house and it's just me and her renting. It works really well and it's very informal. I don't refer to her as the landlord and she doesn't refer to me as the tenant/lodger or anything like that. We are friends and do social things together. I do think I have a good ability to scope people out well which is why the current house share I'm in works well and should allow it to work well when I have my own place and rent out a room.

Why do you suggest no locks on the bedroom door? Also why should I not use the word "tennant" in communications - is this because it is too formal?

Savingforahouse123

youth_leader said:

My daughter had a room in Jesmond and paid £450 pcm, but it was a large house with about six bedrooms. 

My choice would be to have the bedroom with the ensuite for myself, and leave your other bathroom for your lodger and guests you have round.

I think I'd also specify no overnight guests without prior arrangement with you, a poster's lodger has had his pregnant girlfriend staying overnight regularly.  

Thanks. I'll put both rooms on the market and whoever proceeds to move in will have the room they prefer and I'll have the other. Makes no difference to me. The larger room for me gives me a little more luxury but the smaller room means I get more money in rent. However people might be price led and prefer the smaller room that is cheaper.

Yeah as I say I'm in a house share at the moment and I chatted to the owner of the house (who I pay) before I moved in and I had that conversation with her. Basically she said as long as I don't take the mick and I can have friends visit here and there but not constantly and they'd need to respect the house and not smash it up. Basic common sense things really. I'd plan to do the same when I'm the home owner looking for a house mate

[Deleted User]

Around £500 sounds like a reasonable amount, with bills included. 

Tenants and lodgers have different rights, and so presumably FreeBear suggested avoiding the words 'tenant/ tenancy' on the agreement to avoid complicating the two (tenants tend to have more rights, but what you're looking for is a lodger). 

Also, the situation you have with your current landlord sounds ideal, as you have a great relationship and both uphold your end of the bargain. However, you need to protect yourself on the basis that this might not be the case with a new lodger, hence Freebear's suggestion of house rules, termination of contract etc. It just lets everyone know where they stand (I say this as someone who hasn't been provided a tenancy agreement by my landlord!)

youth_leader

I suggested you having the larger room with en suite so you can relax about being 'undressed' - you wouldn't have to worry about dressing gowns etc? 

macman

The rentaroom tax free limit is £7500pa, so maximum £625pm. Above that, you'll have to self assess and pay tax income tax om the rental income.

[Deleted User]

Savingforahouse123 said:

FreeBear said:

Depending on exactly where you are in the Newcastle area, £500-600 per month (bills included) seems to be the typical going rate.

If this is your first foray into having a lodger, there are a few pitfalls to be careful of.

• Do not ever use the words tenant or tenancy in any communications or agreements.
• Do not have locks fitted to the bedroom door (thumb latch internally is OK).
• Ensure it is furnished.
• Specify that access is required from time to time (e.g. for safety checks).
• If bills are included, specify "reasonable usage" so that there is scope to increase rent if energy consumption goes up.
• Do not commit to a fixed term, and have clauses that allow for termination of contract if things turn sour.
• Decide on "house rules" and make them part of the lodger's agreement.
  

Remember, this is your home, and you do not want to create a tenancy along with all the legal protections that would come with it. Lodgers should be easy to kick out should the need ever arise.

Thank you. It's Rowlands Gill direction so 20 mins or so south of Newcastle in the countryside. £500-600 seems a bit steep as I was going to just ask the person to pay rent in one amount to me each month rather than asking for bills money on top (I'd factor bills into the price I charge them).  When you said 500-600 did you mean with or without bills as that seems pretty high already!

I'm in a house share at the moment. My housemate owns the house and it's just me and her renting. It works really well and it's very informal. I don't refer to her as the landlord and she doesn't refer to me as the tenant/lodger or anything like that. We are friends and do social things together. I do think I have a good ability to scope people out well which is why the current house share I'm in works well and should allow it to work well when I have my own place and rent out a room.

Why do you suggest no locks on the bedroom door? Also why should I not use the word "tennant" in communications - is this because it is too formal?

Having a lodger is a great idea and will work well but time to dispense the language of informality. 

Having a written agreement will be important. Not one cobbled together either.

I personally would not include the bills. For example if that person prefers the windows open and heating on - you could end up subsidising that.

You may be tending towards friends rates when it comes to the rent.  Ctax, water, electric, gas. Bills are on the up. You should charge market rate for the rent and 500 to 600 per month included really sounds about right.

Lastly, a tenant has considerably more rights and could take months to evict. You could end up not being permitted to enter their room. To avoid nightmares do some research.  True, people take in lodgers all the time without much forethought. Dig deeper, look at this forum and you will uncover horror stories.

FreeBear

Deleted_User said: Tenants and lodgers have different rights, and so presumably FreeBear suggested avoiding the words 'tenant/ tenancy' on the agreement to avoid complicating the two (tenants tend to have more rights, but what you're looking for is a lodger).

Yup, got it in one. Do every thing you can to avoid conferring the rights of tenancy on any lodger.

Fitting locks to the bedroom door could be seen as one step to granting a tenancy, so should be avoided. If there is only two of you in the house, mutual trust should be all that is needed.