Resident landlords – FAQs

Posted: 18th Jul 2015

What is a resident landlord?

  • the term is more or less self-explanatory and refers to the landlord who rents out a room or rooms in part of property in which they continue to live as their only or principal place of residence;
  • the definition and an overview of the essential rights and obligations of such a landlord are outlined on the official government website.

Why should I rent out a room?

  • the consumer association’s magazine, Which?, suggests that renting out a room in your own home might prove a handy and realistic way of earning yourself some extra money – a prospect that few of us are likely to turn down;
  • more altruistically, you might also reassure yourself that you are doing your bit to help solve the nation’s current shortfall in suitable housing;

What are my responsibilities?

  • you have a basic responsibility for ensuring that any room or rooms you let are safe and in a reasonable state of repair;
  • provided this is the case, however, you are entitled to charge whatever rent you think is reasonable and is likely to attract the kind of tenant or lodger you deem to be appropriate;

So, is it likely to be worth my while?

  • although you have an obligation for maintaining any let rooms in a safe and reasonable condition, you also stand to gain a useful tax advantage;
  • under the government’s Rent a Room Scheme you may claim up to £4,250 against your tax commitment for income you have made from letting your spare rooms;

But what if it doesn’t work out with a particular lodger?

  • one of the attractions in letting space in your own home to someone who may be regarded as a tenant is that the same rules do not apply as if it were an entirely self-contained let;
  • if they have a room but also share some facilities with you, such as your kitchen, your lodger or tenant has what is known as excluded occupation, and typically you may ask them to leave – evict them in other words – whenever you like and without the need for any kind of court order;
  • if your lodger or tenant has a more or less self-contained space in your home, with no need to share any facilities whatsoever, he or she may be able to claim basic protection under the housing laws and you will then need a court order to secure their eviction;

Where do I stand as far as home insurance is concerned?

  • the majority of privately owned homes of course are protected by one or another form of home building and contents insurance – what is the impact on this safeguard if you are letting part of your home to someone else?
  • different insurers are likely to have different policies, so your first step needs to be letting your insurer know that you are planning to let space in your home to a lodger or tenant;
  • the answer might be a simple change of policy (to one which includes landlord insurance), an increase in the premiums you pay to continue the cover, or a termination of the cover you presently enjoy;
  • for reasons that may seem reasonable enough, your current insurer is likely to be especially concerned about the effect any such let might have on the insurance used to protect the contents of your home;
  • if might choose to avoid any doubt or confusion over the continuation of protection for either the structure and fabric of your home or of its contents by arranging landlord insurance – a specialist form of cover that recognises the particular risks and perils that may be introduced simply by your deciding to let some part of your home;

Additional considerations

  • unlike landlords of self-contained dwellings, you are not subject to the requirements of the tenant’s deposit scheme and may choose any appropriate way of managing the deposit you may ask of a lodger or tenant;
  • if you are paying the bills on water, electricity, drainage and water, you may charge whatever proportion of these costs you consider necessary in the rent that you charge;
  • if you have a mortgage on your home and do not inform your mortgage provider that you are letting out a room, it could cause problems further down the line – so do get in touch with them;
  • you remain responsible for the payment of Council Tax, however, and may need to inform your local authority if you no longer qualify for a single person’s discount on the council tax.

Becoming a resident landlord may be easier than you think and simply involves letting out to someone the spare room or rooms that you may have in your home – and you stand to benefit from a useful tax allowance of £4,250 a year.