9% of UK homeowners - 1.7 million people - supplement their income by renting out their spare rooms, according to new research from Santander Mortgages.
More and more people are renting out their spare rooms. Seventy-four percent of homeowners have at least one spare room in their home that is currently either rented out or has no one living in it, and 1.7 million of them rent out a room - up from 2011 when 6% of homeowners had a lodger.
More than a third (35%) of those who rent out a spare room do so to help out a friend or family member. A further 11% do so because they need the extra income to meet their mortgage payments and other outgoings, while 15% need the money to supplement their disposable income.
For those who do rent out a room, the extra income covers an average of 27% of their monthly mortgage payments - a somewhat disappointing figure for the 13% who believe that it would cover more than 50% of their monthly payments. The extra income works out at an average of £164 per month.
The research shows that, although there is a potential £38.9 billion in rental income to be earned in the UK, almost 9 out of 10 homeowners with a spare room still choose not to rent it out.
Phil Cliff, Director of Santander Mortgages, said:
“The ‘rent-a-room’ trend is clearly on the rise as the squeeze on the cost of living drives homeowners to look for ways to supplement their disposable income and cover their mortgage costs. There is clearly still plenty of scope for this market to expand, as homeowners 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 homeowners to earn up to £4,250 per annum tax free from renting out a spare room.
“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.”