Renting out a room to a lodger

[Spegit]

We've just applied for a mortgage and things are SO much worse than when we first started down this road with selling our place and looking for a new one a few months ago. The interest rate we've managed to get is close to 6% for a 3-year fixed term and it is hundreds more per month than we expected. It's still do-able financially but I'm thinking about whether we should consider renting out a room to a lodger. It would potentially work quite well because the top floor has a bathroom and so the person could have a top floor room and their own bathroom. The house is four bedrooms and there are just two of us plus two cats and a dog. We both work from home a lot so wanted to each have a study, which we could still have. (We were looking for a 3-bedroom house but have ended up going for a 4-bedroom one.)

Just wondering if anyone has any experience to share of renting a room to a lodger. Would be interested to hear any views. We're in our late 40s, no kids. It's 20 years since I was last in a houseshare but I did really enjoy it. Of course I get that this wouldn't be a houseshare... anyway, interested in any views and/or stories.

OP is presumably on the DLR, which would connect people nicely to anywhere from Stratford to Canary Wharf and beyond. It's not like zone 3 is entirely unconnected to jobs.

Plus the London rental market is horrible at the moment so to a certain extent people will take what they can get. A quick Spareroom search shows 19,306 room wanted ads across London and 11,301 room offered ads, so there is something of a mismatch, and demand for en suites always outstrips demand.

I once chose a houseshare specifically because one of the other occupants had a dog, even though it was imperfect in other ways. OP will certainly find someone who considers her pets a bonus feature.

Forest Hill in a very pretty street 8 minutes from the station is very nice. :-)

Do think through the implications of having a lodger before letting them move in. I've had two miserable lodger experiences - the first landlord was keen on the money for renting out her spare room but it didn't seem to have occurred to her that I'd actually be living in her flat! So she didn't really want me using the kitchen or being there in the evening! I stayed a week but spent most evenings sat in my car as she didn't want me in the house.

Think about things like use of the living room and kitchen. If you don't want the lodger eating or sitting in the communal areas then provide somewhere for them to sit and eat/study/use a computer in their room.

Accept that they will want to prepare food - my second landlord wasn't keen on me using the kitchen between 6pm and 8.30pm as that's when they ate. They'll need a kitchen cupboard for food, shelf in the fridge and possibly freezer space.

Check about WFH (this wasn't really a thing when I was lodging) or what happens if they're off sick. My landlord didn't want me in the house all day so spent any time off sick sat in the car (again!).

I would have loved a landlord who wanted a pleasant chat over a cup of tea after work, maybe shared a meal once a week or fortnight rather than people who just wanted my money to pay their mortgage and plainly didn't want me in their house.

You don't technically need one if you meet the criteria for a lodger ( check .gov.uk for what this means- yours sounds OK as it includes shared living space with you. If you rented a self-contained annexe it would be different, for example).

However, I used one to avoid any confusion about the core house rules (no smoking anywhere) and to acknowledge receipt of deposit and when and how rent and share of bills/cleaner were to be paid. 1 page of A4.

Also check the tax-free allowance you can make from renting a spare room - if you tick that box (ie don't receive more than £× per tax year) then you won't have to complete a tax return purely on the strength of that income.

Oh god those experiences sound awful. I’m sorry you had to go through that!

It’s absolutely not only about money for us. We have a hugely extroverted dog who would like nothing more than another person in the house and my DP and I too would welcome some company.

You can keep interviewing people until you find one that you like! And you can choose male/female and age etc via spare room website. You'll know who you click with. I've met all sort of people interviewing with spare room but , sort of like dating, sometimes you just get a good feeling for someone and it usually goes both ways! A house with dogs sounds ideal for the right person.

I would have it rolling so for example say three months initially then one months notice either way so you can get rid easily if need to. But be fair and make that very very clear so you're not uprooting someone who really wants some stability. In London especially there are always people looking for shorter term.

Another option is air bnb. Will be more coming and going but you can charge more and you're protected by their insurance.

I never had a formal contract but I put everything we had agreeed in terms of rent and what it includes and notice period in an email that I asked them to reply to

This experience screams of being young and naive and not knowing how to be assertive or enforce boundaries. Sorry you had a hard time but the OP and her husband don't need to have this agreement if they discuss things like guests etc in advance.

You can still have a lodger, you just need to make sure that their lodgings with you is their main home. Easiest way to do this is have an overseas student or worker. My DD has an Irish nurse who works at the local hospital.

Yes you do have to - the government website says if they pay monthly it's one month notice but if they pay weekly it's one week notice

With over night guest I would say to be discussed in advance.
Then if it's a friend in town for two days you can say fine. If it's a random they bring back from a nightclub at 2am then no.

TBH I think my two awful landlords just hadn't thought through getting a lodger. They'd have probably been fine with a weekly commuter who actually lived somewhere else and literally needed somewhere just to sleep on Tues-Thurs nights each week but was otherwise not in the house at all.

What if it’s their DP who they’ve been in a relationship with for several years and want to have round two or three evenings and nights, each and every week?

I’m not sure how that would work in a situation like OP’s, either.

@Spegit my advice is to get a proper contract drawn up by a solicitor, there’s a lot to cover. Treat this as a business arrangement , they are not your mate who you are doing a favour for - they are your paying customer.

Agree everything upfront.
Have interviews with both of you and your dog there.
Be aware of your legal responsibilities eg gas safety, compliant locks on their bedroom door , insurance, council tax

@MongoFrogman that's for op and the lodger to discuss before they agree a yes or no to the lodger moving in

I don't think you need a lawyer you can use the example template on spare room or shelter website

Whatever you do, make sure the lodger doesn’t have a lock on their bedroom door!

I have a bathroom-style thumb-turn lock so that the lodger can lock the door behind her when she’s in the room if she likes. But she can’t lock it when she goes out.

I never go in the room but I do retain the right to, according to law and the contract. Lodgers don’t have exclusive access to their rooms, unlike tenants.

Why?
My house used to be a care home so many of the rooms have locks - I see that as a positive. I have spare keys to all the rooms as well as a master key.

It’s to make clear that the person is a lodger, not a tenant. That’s important as it means the landlord/ landlady won’t have to go to court if they need to evict them.

It’s discussed here:

https://blog.spareroom.co.uk/lodger-vs-tenant/amp/

p.s. Is your house enormous?!

I've seen it done well- a colleague had a granny flat style area attached to her house and rented it to a student lodger for a few years. The student had the privacy of her own entrance and bathroom and enjoyed a cheaper rent and less commitment than being a tenant. She became a friend of the family afterwards.
Also seen it done badly quite recently. Owing to housing crisis, a friend had to live in lodgings where she was expected to pay someone's mortgage but also not exist. No guests, ever, stay in her room and limited set times to shower and use the kitchen/laundry. Treating tenants as sub-human cash machines is the key to getting things wrong or not being able to keep them.

The lodger/tenant distinction is important but a lock on the door doesn’t do that by itself. A lodger agreement making it clear it is not a tenancy contract and shared living spaces aren’t going to be overridden by a lock, though if there is any ambiguity it would indeed be a potential piece of evidence in favour of it being a tenancy.
We also advise (by email) new lodgers to read up on their rights as a lodger before they commit. When there are threads on Mumsnet about lodger problems it is always obvious a lot of people don’t realise there is a difference.

yes it is enormous! When we first moved in I used to have nightmares about discovering extra rooms. It didn’t actually cost much to buy but obviously maintenance and bills are eye watering.

A lock does not turn a lodger into a tenant; having a lodger agreement in place and sharing living spaces like the kitchen always means they're a lodger. We have a rack bolt (opens with a key, somewhere between a bolt and a lock) on the lodger's door because the dog kept pushing the door open, going for a mooch (no damage) and getting himself shut in when the door swung shut again.

I think there is a balance to be struck between making sure they understand the difference between a lodger and a tenant (this is one way in which the lodger agreement is useful) and making them feel desperately insecure by announcing they have no rights.

I did have one prospective lodger who booked a viewing and then his friend enlightened him as to the difference. Next thing I know he's messaging me saying that he'd want the same rights as a tenant, including six months notice (we're in Wales). I pointed out that I'd never yet evicted a lodger but did need to retain the option in case, for instance, he put the dog in danger or turned out to be a nutter. He didn't seem to understand that while he was certain he'd be the perfect housemate and would never endanger the dog, I didn't know him from Adam. We mutually decided a lodger arrangement wasn't for him so never got as far as viewing.

However, make it clear on the Spareroom advert that you're a live in landlord (choose that tickbox, mention you own it in the description) and use a proper lodger agreement like the Spareroom template. But I'm not sure it's your responsibility to be teaching a module on Introduction to Housing Law 101.

TV licence would be something to consider then - if you don’t currently have one & they do want to watch TV, even if it’s just on their laptop, who would pay for it?

A lodger would not be covered by their landlord’s TV license, anyway, as they are seen as being separate households.