If you are under occupying your home an option that you may wish to consider is taking in a lodger. This could help you to bring in the extra money to bridge the gap between your Housing Benefit and your benefits.  You should get independent advice on how the income from a lodger could affect any other benefits you may be claiming.

If you decide to have a lodger you must inform YHN. Only secure tenants can take in lodgers and the Tenancy Agreement states that you have the following rights:

  • You can take in lodgers as long as this does not make the property overcrowded. (Please ask us if you are not sure whether your home would become overcrowded if you took in a lodger.)

Taking in a lodger may reduce the amount of Housing Benefit you get.  If you receive Housing Benefit you must tell YHN if you take in a lodger. Some important things for you to remember include:

  • Your lodger will not have security of tenure like you
  • You will be responsible for legally evicting your lodger if you want him or her to leave

You should also bear in mind your own personal safety when considering taking a stranger into your home. When showing someone round your home you should:

  • Always have a friend accompany you to interview new lodgers
  • Keep valuables locked away during the interview
  • Make sure you use the interview as an opportunity to ask about anything that concerns you
  • What is a lodger?

    A lodger is someone who rents a room in your home and shares your facilities. A lodger is not the same as a subtenant, who has different rights. For example, a lodger may not have the right to put a lock on their bedroom door.
  • How much should I charge a lodger?

    What you charge your lodger will depend on what facilities you are providing for them. To give yourself an idea you may wish to refer to websites such as http://www.spareroom.co.uk/ and look up what other people in your area charge for similar accommodation
  • What will I need to provide for my lodger?

    You must provide your lodger with a furnished room and use of other communal areas such as the kitchen and bathroom. It is up to you to decide whether you wish to provide meals and do their laundry/cleaning.
  • Can I evict my lodger if things don't work out or I need the room back?

    If you wish to evict your lodger you must provide them with a reasonable amount of notice. When you take in a lodger it is advisable to write up a licence that you both sign and agree to the conditions of.
  • Will I have to pay income tax on the income I receive from my lodger?

    If the income from letting a room goes above a certain amount (the ‘threshold’), then you may also be liable to pay income tax. As a general rule you can keep the first £4,250 of rental income a year tax free and it wont affect any Child Tax Credit or Working Tax Credit you may be receiving. You should get independent advice about what the income from letting a room could mean for you.
  • Will my council tax increase?

    If you claim single person discount for council tax you may no longer be eligible for this if you take in a lodger. You should get independent advice about how taking in a lodger could affect your council tax.
  • Will having a lodger affect my home insurance?

    YHN has negotiated some changes to the cover provided under your Tenants Contents Insurance Policy to allow you to take in a lodger. You must tell YHN and your insurer that you are going to let your spare bedroom to a lodger before doing so, but your Tenants Contents Insurance Policy will continue to insure you. Your policy will not cover your lodger’s possessions and they will need to arrange their own policy in their own name to cover their contents. In addition, your policy will not provide cover for damage caused by theft or malicious damage unless there is evidence that force and violence has been used to get into or out of your home. This rule also applies where your home is lent, let or sub-let. If your policy is not through YHN you will need to inform your insurer that you are going to let your spare room to a lodger.
  • How will having a lodger affect my benefits?

    If you take in a lodger you will need to tell your local benefits agency immediately. Taking in a lodger may affect the amount of benefit that you are entitled to. If you don't tell them, you may end up having to repay an overpayment or be prosecuted for fraud. The benefits agency will assume your lodger is paying you for occupying rooms in your home. Normally the first £20 of weekly income from a lodger will be ignored and won't affect your benefits, but you should seek advice about your individual circumstances.
  • How will taking in a lodger affect my household utility bills?

    An extra person in the household may increase the amount you spend on things like gas, electricity and water.
  • Should I do a background check on my lodger?

    It is a good idea to do a background check on your lodger, even if you know them well. This is for your own safety and security as they will be sharing your home. For example, you may wish to get a reference from their previous landlord. You may also wish to carry out checks to see if they can afford their rent. The extent of the checks you carry out may differ from one person to the next, and it is for you to decide what may be appropriate.
  • Can my lodger continue living at my property if my tenancy ends?

    The lodger can only continue to live at your property whilst you have a tenancy there.
  • How will the money I receive from my lodger/s affect my other benefits before and after Universal Credit?

    Before Universal Credit If you have a lodger after the under occupation charge comes into force on 1 April 2013, their bedroom will be classed as occupied. As long as all the bedrooms in your property are occupied on a permanent basis you will not be classed as under occupying your property and will not be affected by the charge. However, the rent you receive from the lodger may affect your benefit entitlement. The first £20 of rent received from lodgers is disregarded when calculating Housing Benefit entitlement. After Universal Credit If you have a lodger after you have moved over onto Universal Credit their bedroom will not be classed as occupied under the under occupation rules. This means that you will be classed as under occupying your property and will have to pay the charge. However, the rent you receive from the lodger will help you pay the charge and any excess rent you receive over and above the charge will not reduce your benefit entitlement.
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