Number of spare rooms rented out by home owners in the UK on the rise

An estimated 1.7 million people, or 9% of UK home owners rent out the spare room in their house and the income covers on average 27% of mortgage payments, new research shows.

But many don’t have strangers in their home as 35% rent to a friend or family member, according to the research from Santander Mortgages.
 
A further 11% do so because they need the additional income to meet their mortgage payments and outgoings whilst 15% need the money to supplement their disposable income.

Its says that the rent a room trend provides UK home owners with over £3.3 billion per year in rental payments, an average of £164 per month for each recipient.

Nearly three quarters, 74%, of home owners have at least one spare room in their home that currently is either rented out or has no one living in it, while 26% have no unoccupied rooms in their house.

The research shows that there is currently a potential £38.9 billion of rental income to be made in the UK from renting out spare rooms. However, 87% with a spare room still choose not to rent it out.

The research also shows that 20% of those in the North West with a spare room and 19% of those in London with a spare room rent out a spare room. Meanwhile Brits living in the East of England are less enthusiastic about taking in a lodger with only 7% doing so.

Of the 34% of home owners with unoccupied rooms who would consider renting out their spare room, some 18% would do so if they needed to financially and 23% would rent out the room if a friend or family member needed it. Some 11% would consider it if they could find an appropriate tenant and 6% would do so if they were able to make decent money from it.

The research further reveals that of those currently renting out a room, 13% believe that the rental income would cover more than 50% of their total mortgage payments each month. On average, respondents said that 27% of their mortgage payments are covered by spare room rental income per month.

The data also shows that 24% of home owners have one room spare, 23% have two rooms spare, while 19% have three rooms spare in their house. Only 8% have four or more unoccupied rooms in their home.

‘The rent a room trend is clearly on the rise as the squeeze on the cost of living drives home owners to look for ways to supplement their disposable income and cover their mortgage costs,’ said Phil Cliff, director of Santander mortgages.

‘There is clearly still plenty of scope for this market to expand, as home owners with unoccupied rooms put their property to work by renting rooms to friends, family or tenants. It is also worth bearing in mind that the UK Government’s rent a room scheme enables home owners to earn up to £4,250 per annum tax free from renting out a spare room,’ he explained.

‘We advise that before taking this step, anyone with a mortgage should speak to their mortgage lender to ensure they stay within the terms and conditions of their mortgage agreement,’ he added.