Lodger could help homeowners during credit crunch

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by Kay Murchie

With rising food and fuel costs, homeowners are struggling with day-to-day living costs and according to Abbey Mortgages, taking in a lodger could help them during these difficult times.

According to Abbey Mortgages, spare bedrooms could net over £60 billion each year.

As the credit crunch continues to bite, homeowners could find the solution in renting out their spare room as figures show that more than 18.2 million homeowners have at least one currently uninhabited spare bedroom.

Abbey Mortgages claims that Britons with a spare room could raise £3,468 extra each year, on average £289 per month.

In addition, those households with a spare room could sign up to the Government’s rent-a-room scheme which enables them to receive up to £4,250 tax-free ‘gross’ rental income a year (receipts before expenses).

The scheme is an optional exemption scheme that enables you to receive income from renting furnished accommodation in your only or main home.

According to Abbey Mortgages, around 388,000 homeowners are already renting out one of their spare rooms, with a further 1.6 million considering the idea.

Phil Cliff, Director of Abbey Mortgages, believes now is a good time for those considering taking in a lodger to take the plunge, particularly as income is being squeezed. Renting out a spare room could be the answer for those looking to raise extra funds, according to Mr Cliff.

However, those taking the plunge should inform their lender advises Abbey Mortgages.