Want extra cash? Get an extra person.
2012 is heading inexorably towards its expensive December conclusion, and with no sign of the economic tightness easing off, many of us might think of ways in which we can raise extra cash. Obviously, Bitterwallet staff are always being approached to sell our bodies* but what about less drastic ways to get a nice wedge? Well, according to LV Home Insurance, around 950,000 UK homeowners in the UK are now doing so by renting out spare rooms in their houses.
And it seems to be a good plan. Whether homeowners just want to boost income or, like 30% of survey respondents, they need the extra cash to pay their bills, there is also a market for tenants who can’t get a mortgage and who can't or don’t want to pay extortionate private rental prices.Neither is it just those struggling to get on the housing ladder- the average age of a lodger is 29, with 6 per cent of lodgers now aged between 45 and 54.
What’s even better about this extra cash is that it could be completely tax-free. Under the well-established rent-a-room scheme, homeowners can receive up to £4,250 a year as a tax free income from the room rent. Even if the rents received exceed this amount (with average single-room rents averaging £400 a month), the first £4,250 can be tax free so you only pay tax on the rents over and above this amount. Alternatively you can deduct all your expenses and be taxed on the net receipts if this would result in a lower amount of taxable income.
Besides, 70% of landlords say they would prefer part-time lodgers to their full-time equivalents. While this might sound silly, if you live near a University (for example) renting a room to a mature/foreign/postgraduate or mature foreign postgraduate student would mean you could have your home all to yourself for large parts of the calendar year, but still rake in thousands of pounds of lovely money.
So if you’re thinking of taking the lodgering plunge let us know- we’ll send Mof round.
* for medical research.