Spare bedrooms could provide extra money

Homeowners wishing to make their property work for them in the credit crunch could rake in a whopping £63.4 billion extra each year by renting spare bedrooms out to lodgers, according to research by Abbey Mortgages.

Indeed over 18.2 million homeowners have at least one currently uninhabited spare bedroom. And with the average monthly asking price at £289 per month, Britons with a spare room could raise £3,468 extra each year. What's more, those that join the Government's rent-a-room scheme, can receive up to £4,250 tax-free ‘gross' rental income a year (receipts before expenses). The Rent a Room scheme is an optional exemption scheme that lets you receive income from renting furnished accommodation in your only or main home.

Abbey Mortgages' research also showed that some 388,000 homeowners are already renting out one of their spare rooms, which is netting them combined £1.1 billion annually. And a further 1.6 million are seriously considering doing so - worth a potential £5.6 billion.

However, if you're a mortgage payer, Abbey Mortgages points out that while the vast majority of lenders allow you take in a lodger with the minimum of hassle it's always best to check both your mortgage lender's and insurer's terms and conditions.

Phil Cliff, Director of Abbey Mortgages, commented: "With income being squeezed in so many ways, those looking to raise some extra money may find that their spare room could provide the answer. Demand for rooms is likely to be fairly high too and with the Government providing tax free incentives for landlords, now is certainly a good time for those considering taking in a lodger."

For full terms and conditions on the HMRC's Rent a Room Scheme visit:
direct.gov.uk

Abbey offers a range of competitive mortgage deals for homebuyers and those looking to remortgage. In the core 75 per cent LTV range, two and three year fixes now start at 6.19 per cent with £995 fee. Abbey also has two competitive 70 per cent LTV products in the range - a two-year fix at 5.98per cent with £995 fee and a three-year fix at 5.98 per cent with £1,295 fee.

For more information, visit abbey.com