Renting Out a Room

Since April 1992, a landlord who rents out one or more rooms in their home can take advantage of the Rent a Room scheme. This means that the first £4,250 of income received from renting is usually exempt from income tax. To be eligible the landlord must be an owner-occupier or tenant, and must be letting furnished accommodation in their only or main home. The tax relief applies to gross income received in the tax year from the letting, regardless of how many rooms are let.

There are implications of sharing your house with a stranger.

• Always take up references from people who know the person who is renting the room. If possible, get a reference of the person they last lived with - this may be a parent or their last landlord.
• You can check the market rent by looking in local newspapers.

Before a Lodger Moves In

Before the lodger moves in, take some photos of the room and draw up a full inventory of its contents. The photos may be useful if the lodger causes damage and you need to claim money for repairs.

You should also decide how often rent will be due - perhaps weekly or monthly - and how this will be recorded. Ask your new lodger for a deposit, typically one month's rent, to be held by you until the lodger leaves.

Giving Notice

As long as you have lived in the house, or a member of your family has lived in the house, as your/their only or main home since the beginning of the letting agreement, and as long as you share accommodation with the tenant, then the tenant is likely to be an 'excluded occupier'. For this definition to apply, you must be sharing the use of a room, for example living room, kitchen or bathroom.

An excluded occupier does not have any statutory protection against eviction but you should still give notice at the end of the tenancy. In nearly all cases, four weeks' notice would be considered reasonable. The notice you give does not need to be in any particular form, and could be oral. However, it's best to give notice in writing and keep a copy for yourself.

At the end of a tenancy, you should check the inventory with your lodger, and after you have made any deductions for damage or rent arrears you should return the rest of the deposit to your tenant. You do not have a legal right to deduct money for fair wear and tear - if you tried to do this your tenant could sue you. If possible, get your departing lodger to sign a receipt for the money returned and deductions you have made