In times like these, many people want to earn some extra money. According to research from Abbey Mortgages, homeowners could be missing out on an extra £63.4 billion per year by missing out on the opportunity to rent spare bedrooms to lodgers.

More than 18.2 million homeowners have one or more uninhabited spare bedrooms. The average monthly asking price is £289 per month so a homeowner with a spare bedroom could earn an extra £3,468 per year.

By joining the Government’s ‘rent a room’ scheme, they could earn up to £4,250 rental income each year tax-free (that’s gross, i.e. before expenses). This Rent A Room scheme is an exemption scheme to allow people to earn income by renting furnished accommodation in your main or only home.

This subject is covered in CeMAP training too, and as a mortgage advisor, it is worth mentioning to your customers, especially if they approach you later struggling to meet their repayments as many are doing now.

As a mortgage payer, you need your mortgage lender’s permission to let out a room. The majority do not have a problem with this, but it is always worth checking with both the mortgage lender and the house insurer.

Around 388,000 homeowners already rent out a spare room, earning around £1.1 billion per year. Currently, around 1.6 million more are considering renting a room out, worth around £5.6 billion potentially.

Phil Cliff, Director of Abbey Mortgages, commented: “With income being squeezed in so many ways, those looking to raise some extra money may find that their spare room could provide the answer. Demand for rooms is likely to be fairly high too and with the Government providing tax free incentives for landlords, now is certainly a good time for those considering taking in a lodger.”

Little things like this are the kind of detail and information from the CeMAP that is incredibly useful to anybody, whether they’re a mortgage advisor or not!