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For some people, offering out a spare room to a lodger may be a sensible option.  This would mean that Housing Benefit would no longer consider the room to be spare. 

In addition to this, the first £20 of weekly income from a lodger is ignored and won't affect your benefits.  If you receive more than £20 a week in rent, the extra cash is likely to affect your benefits - although overall you should still be better off.  Call 01389 738555 for information and advice about the effects additional income will have on your benefit. 

Homeowners and tenants who let furnished accommodation and take in a lodger are exempt from paying tax on rental income of up to £4,250 a year - and because it's tax free, it also won't affect the amount that you receive in Child Tax Credit or Working Tax Credit either. 

Step by step guide to renting out a room 

Step One - Get your house rent ready 

Make sure your home and the room you want to rent out is safe, fire proof and that you have general safety sorted. 

If you are planning to rent out a room, let your landlord know as you may need to get permission first.  Councils and housing associations usually allow tenants to take in a lodger, but you have to check and get permission. If you are a Council or a housing association tenant you should also explain the conditions of your own tenancy agreement to your lodger, to ensure that both you and your lodger adhere to this. 

Also check with our Benefits Section on 01389 738555 to check if the extra cash affects your entitlement to benefits. 

A general guide to letting a room is available here: 

http://www.communities.gov.uk/publications/housing/lettingrooms?view=Standard

Step Two - Advertise 

There are lots of ways you can advertise your spare room.  Try putting a notice in your local shop or go online and advertise it for free through one of the many websites available. 

Step Three - Find someone that's right for you 

Letting someone live in your home is a big step, so it pays to be prepared. 

Take your time to talk to the people viewing your property to make sure they are a good fit for your home. 

It is also good to lay down your simple ground rules early, so you both know what to expect. 

Step Four - Get references 

Ask your new lodger if they can provide references from en employer or previous landlord.  This can give you extra peace of mind that the agreement you are entering into is likely to be alright.

Step Five - Get it in writing

Have a written agreement between you and your lodger. 

This should include: weekly rent amount and how to pay; which rooms/facilities the lodger is entitled to use; services you agree to provide; any share of household bills, how long until the weekly rent amount is reviewed , house rules; and notice period.  There are many guides to lodger agreements available through bookshops and stationers. 

Safety tips 

  • Always have a friend accompany you to interview new lodgers.
  • Keep valuables locked away during the interview.
  • Make sure you use the interview as an opportunity to ask about anything that concerns you.

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