Got a spare room? Your guide to taking in a lodger
Thinking of taking in a lodger? A lodger is someone who rents a room in your home and shares areas such as kitchen and bathroom. Some people provide services to their lodgers, such as providing meals or doing their laundry. There are a number of things you need to think about before taking in a lodger. What you need to know Can I take in a lodger? Secure tenants have the right to take in lodgers. If you have an introductory tenancy you can not take in a lodger. You must ask us before taking a lodger use the request form in this booklet. Taking a lodger must not create overcrowding you will be responsible for legally evicting your lodger if you want them to leave. We will not stop you taking in a lodger, unless it s for a good reason. However you need to remember you have no right to sub-let the whole of your property. How can I find a lodger? There are sites that provide useful contacts: www.roomster.co.uk www.easyroommate.com www.spareroom.co.uk You can also fi nd a lodger by advertising in your local shop or newspaper. Taking in a lodger who you already know, or someone who has been recommended by a friend, is a relatively safe and easy way of renting out a room in your home.
Other things to think about Will the lodger fi t in with your lifestyle? Do they, for example, work shifts? Will they be in the house when you are out? Will they fi t in with your family and/or pets? You also need to think about your personal safety make sure you consider asking for references for your prospective lodger Which areas of the house will they have access to? Will they be allowed overnight visitors? How much cupboard space will you allow them in shared areas such as the kitchen and bathroom? What about access to use items such as the washing machine? You need to set some basic ground rules including coming in late at night or leaving early. How much can I charge? This is up to you and up to what a lodger is prepared to pay. A lot depends on the area you live in, the size of the room and the demand for accommodation, and also any services that you are including. Have a look at what other people in your area are charging, by looking at www.spareroom.com for example. What about the rental agreement? A written agreement signed by you and your lodger will make sure that you are both clear about what is expected, including how much notice you have to give when you want the lodger to leave. You will have to be very careful that you do not accidentally give your lodger greater security to remain. A sample copy of an agreement is included within this pack. You can also access a standard agreement, for a fee at www.spareroom.co.uk/content/info-landlords/lodger-agreement. It is important to remember that a lodger can only continue to live at your property while you have a tenancy there.
How will my benefits be affected? Any income received from a lodger will have affect any means tested benefi ts you get. However the fi rst 20 per week is ignored. If you provide meals then 50% of anything over 20 per week is also ignored. You will have to inform the local benefi ts agency as soon as you take in a lodger. If your benefi t has been reduced because of the size of your property you are seen to have a bedroom more than your family requires then taking in a lodger may stop this reduction. Will my income tax be affected? If you let furnished accommodation to a lodger you can keep the fi rst 4,250 of rental income per year tax free, under the Rent a Room Scheme. This is equivalent to 81.73 a week. As it is tax free it will not affect the amount you receive in Child Tax Credit or Working Tax Credit. Other money-related matters to consider An extra person in the house may increase the amount you spend on things like gas, electricity and water You may have to pay more Council Tax Your home contents insurance may be affected.
What to do next If you decide that taking a lodger is right for you, follow this checklist of things you need to do: 1) Complete the request form and send in to NCH copy enclosed in this pack 2) You should receive a decision letter within fi ve working days you are then free to take in your lodger 3) Check local rates and set a fair rent for what you are offering 4) Get the room ready it will have to be furnished to qualify for the Rent a Room Scheme 5) Advertise your room 6) Interview potential lodgers and take up references before agreeing to rent out a room to them 7) Draw up your Lodger Agreement and make sure it includes all the information about what is expected from both sides. There should be a clearly stated notice period. Both you and the lodger will have to sign this agreement 8) Advise the Benefi ts Agency that you have taken in a lodger and give full details of the rent charged sample letter enclosed in this pack 9) Check that your home contents insurance is still valid your insurer may need to make an adjustment to your policy. Your lodger will need to insure their own belongings separately 10) Inform Nottingham City Council if you have been claiming single occupancy rate for Council Tax 11) Inform your tax offi ce if you earn more than 4,250 per year. Contact us:
Frequently asked questions What are the welfare reforms and how will it affect me? From April 2013, the Government is reducing the amount of housing benefi t paid to tenants of working age who have one or more spare bedrooms in their homes known as under-occupying. What is working age? If you or your partner are of pension credit age these deductions will not apply to you. This means if you are a man aged 65 (date of birth on or before 31st March 1948) or a woman aged 61 years and fi ve months (date of birth on or before 5th October 1951) the deductions won t apply. What do the changes mean? The size criteria in the social rented sector will restrict housing benefit to allow for one bedroom for each person or couple, living as part of the household, eith the following exceptions: Children under 16 of the same gender are expected to share a bedroom Children under 10 are expected to share a bedroom regardless of gender Disabled tenants or partner who needs a non-resident over night carer will be allowed an extra bedroom. What are the concessions? In March 2013, the Government announced some new protections for disabled children, foster carers and members of the armed forces. If this affects you, please contact us for further details. How much will this cost me? When the Government s proposals are introduced in April 2013 the deductions will be: 14% of gross rent for one bedroom 25% of gross rent for two or more spare bedrooms. For example, if you have a weekly rent charge of 73.85 and you are under occupying by two bedrooms, your housing benefi t could be reduced by up to 18.46 a week. If you are under occupying by one bedroom, your housing benefi t could be reduced by up to 10.34 a week. If you are a secure tenant and want to sub-let part of your home, you must get written permission from us before you do so. We will not unreasonably turn down your request. You have no right to sub-let the whole of your home. You will not be given permission to sub-let if you are an introductory tenant.
What is a lodger? A lodger is someone who rents a room in your home and shares your facilities. A lodger is not the same as a sub-tenant, who have different rights. For example, a lodger may not have the right to put a lock on their bedroom door. What will I need to provide for my lodger? You must provide your lodger with a furnished room, and use of other communal areas such as the kitchen and bathroom. It is up to you to decide whether you wish to provide meals and do their laundry/cleaning. How much should I charge a lodger? What you charge your lodger will depend on what facilities you are providing for them. To give yourself an idea you may wish to refer to websites such as www.spareroom.co.uk and look up what other people in your area charge for similar accommodation. Can I evict my lodger if things don t work out or I need the room back? If you want to evict your lodger you must give them a reasonable amount of notice. When you take in a lodger it is advisable to write up a licence with conditions that you both sign and agree to. Will I have to pay income tax on the income I receive from my lodger? If the income from letting a room exceeds a certain amount known as a threshold, then you may also be liable to pay income tax. You are advised to obtain independent advice about the tax implications for you. Will my council tax increase? If you claim single occupancy discount for Council Tax you might not be eligible for this if you take in a lodger. You should get independent advice about the council tax implications for you. Will having a lodger affect my home insurance? If you have a home insurance policy, you must contact your provider to make sure you are still covered and inform your lodger if they require their own insurance.
How will having a lodger affect my benefits? If you take in a lodger you will need to inform your local benefi ts agency immediately. Taking in a lodger might affect the amount of benefi t that you are entitled to. If you don t tell them, you may end up having to repay an overpayment or be prosecuted for fraud. The Benefi ts Agency will assume your lodger is paying you for occupying rooms in your home. How will taking in a lodger affect my household utility bills? An extra person in the household may increase the amount you spend on things like gas, electricity and water. Should I do a background check on my lodger? It is a good idea to do a background check on your lodger for your own safety and security as they will be sharing your home. For example, you may wish to get a reference from their previous landlord. You may also wish to carry out checks to see if they can afford their rent. The extent of the checks you carry out may differ from one person to the next, and it is for you to decide what may be appropriate. Can my lodger continue living at my property if my tenancy ends? The lodger can only continue to live at your property whilst you have a tenancy there. Useful Websites www.england.shelter.org.uk www.spareroom.co.uk www.lodgers.com www.dwp.gov.uk
Notification of your intent to take in a lodger Name: Address: People currently living at property Name Date of birth Relationship to tenant Details of lodger(s) Name Date of birth Relationship to tenant Please attach a passport sized photograph of your proposed lodger to this application form. You will receive a response to this request within fi ve working days. Once permission has been given, you should inform the Housing Benefi t Department at Nottingham City Council immediately as any income received from taking a lodger may affect your Housing Benefi t entitlement. Any lodgers may only stay at your property while you have a secure tenancy. When your tenancy ends they must leave the property. Any agreement signed with them must include this information.
VACANCY LODGER WANTED Nottingham City Homes, 14 Hounds Gate Nottingham NG1 7BA Telephone: 0845 330 3131 www.nottinghamcityhomes.org.uk Registered in England and Wales number 5292636