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23 April 2008

Homeowners seek lodgers to offset rising mortgage costs

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by Gill Montia

Homeowners seek lodgers to offset rising mortgage costs

With difficult times ahead for 11.8 million British mortgage holders, more people are choosing to rent out spare rooms in their homes to help with rising interest rates and the “payment shock” that awaits many who will be remortgaging this year.

SpareRoom.co.uk, the property portal that links up providers and seekers of shared accommodation, has reported a 100% rise in homeowners letting out a room in the past 18 months, from 400,000 to over 700,000.

According to Matt Hutchinson, a spokesperson for SpareRoom, increasing numbers of people are raising income in this way to top up their mortgage payments.

In uncertain times, taking a lodger is a sound move, particularly as it can be a short-term measure, allowing property owners to regain their space once the outlook improves.

The trend is likely to continue, as a typical mortgage taken out to buy a home is now £158,100, compared with £61,800 in 1998. In addition homeowners are struggling with rising energy and food costs.

Some niche mortgage lenders will even allow income from a let room to be factored into a mortgage application.

All that remains is to find the perfect lodger.


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