Lodgers

Pros and cons of taking on a lodger

Charles BrecqueCharles Brecque
Last updated on:
February 17, 2022
Published on:
January 8, 2022

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Are you comfortable with sharing your home with someone else? If so, renting a spare room out to a lodger could bring you extra income and help cover the cost of running your home. But is the additional income worth it? What are the pros and cons of taking on a lodger? This article will explain what a lodger is, the pros and cons of taking on a lodger and how to create a lodger agreement to help you make your decision.


What is a lodger?

Lodgers have less rights than tenants because they are living in your main home and sharing facilities with the homeowner. A lodger is therefore treated as an excluded occupier which means they do not have exclusive possession of the room they are renting, the lodger licence can be terminated at a reduced notice compared to tenancies and and can be evicted without a court order.


What are the pros of taking on a lodger?

Tax-free rental income

Renting out a spare bedroom in your home can be a great way to generate rental income which can cover some of your living and operating costs and this income can be tax-free depending on your lodger licence fees and how often you take on lodgers. Thanks to the government's Rent a Room scheme, your first £7,500 in rental income is tax-free .  


Company

If you are single, taking on a lodger can give you some more company and make your home feel less empty. Whilst it's unreasonable to expect lodgers to spend a certain amount of time with you, you will naturally bump into them as they will be sharing common areas with you such as your living room and kitchen.


Home Security

Live-in landlords who take on a lodger on a longer term basis can benefit from having a person in the house if and when they are away which will improve the security of your home.


What are the cons of taking on a lodger?

Less privacy

Whilst you can define boundaries with your lodger in a set of House rules, taking on a lodger means that you will have less privacy in your own home. This is an important consideration especially if you are not used to sharing space and can become challenging if you fall out with your lodger. It is therefore essential that you follow a process for finding the right lodger so that the likelihood of this happening is reduced.

Damage to your property

More people in your own home means that inevitably accidental damage is more likely to happen. Whilst some damage can be prevented, ensure that you have appropriate home insurance and contents insurance to protect you if ever damage does occur.


Compliance

Whilst a live-in landlord has less responsibilities than a live-out landlord renting a property to a tenant, these responsibilities are more than if they were living on their own. For example, you will need to ensure that your electrical and gas appliances are safe and  you will be responsible for repairs. Moreover, taking on a full-time lodger might affect your council tax if ever you had a single occupancy discount.

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How to take on a lodger?

Once you have found a suitable lodger and weighed the pros and cons of taking on the lodger, you will need a lodger licence agreement to rent out your spare room. Whilst it might be tempting to download the first lodger agreement template you find online, it might not be up-to-date, it might in fact be a tenancy agreement or not even be legally valid. To customise a lawyer-approved lodger licence to your specific requirements, sign up to Legislate, create your lodger agreement by answering simple questions and invite your lodger to the contract for e-signature.


About Legislate

Legislate is an early stage legal technology startup which allows large landlords, letting agents and small businesses to easily create, sign and manage contracts that are prudent and fair. Legislate’s platform is built on its patented knowledge graph which streamlines the contracting process and aggregates contract statistics to quickly unlock valuable insights. Legislate’s team marries technical and legal expertise to create a painless, smart contracting experience for its users. Legislate is backed by Parkwalk Advisors, Perivoli Innovations and angel investors.

The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.

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