WHO WOULD SHARE A HOUSE?
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Guest Blog by Mandy Thomson founder of lodgersite.com
The 2011 census showed 1,850,137 (7.9%) households which were neither one person nor a family in England and Wales. This was just 6.7% back in 2001.
So who are these people who are prepared to live with strangers? The answer is, almost everyone and anyone – from almost all walks of life – even the affluent – and all age groups. This has been driven of course, in part by the housing crisis, but more so by the credit crunch. High purchase prices, coupled with mortgages being harder to obtain, has driven a vastly increased demand for rental property and driven up rents – making even the most modest rental in a many areas unaffordable for many single people. In the meanwhile, as we all know, reductions in income, in both real and actual terms, and increased difficulty getting credit, has made people look to alternative means of raising additional income – a spare room, whether you own or rent your home, is a relatively easy means.
While traditionally house sharing has been the preserve of the young (and still is very much) – students and twenty somethings starting out on their careers, the credit crunch has seen an enormous increase in older people looking to share a house or flat. SpareRoom has shown a 50% increase over the previous 5 years in the 45 – 54 age group (though some of this number will be made up of prospective lodger landlords advertising rooms) while house sharers over 35 have increased by 26%.
So aside from students and young people in their first jobs, why might someone need or want to share a house or flat?
- Divorce and separation is one reason – someone who is the sole or main breadwinner, already paying a mortgage or rent against the family home may not be able to afford a second rent or mortgage, or they may have been a stay at home partner, with little or no income of their own. Even a separated partner who can afford somewhere of their own may want to rent a room on a temporary basis, while they find their feet.
- Job loss – anyone with savings or assets (aside from the equity in their main home) over £16,000 will be disqualified from claiming means tested job seeker’s allowance or means tested local housing allowance (previously housing benefit) and even if they can claim the full amount of LHA, this is capped so it still may not cover the full rent in an expensive area such as London. LHA rules now also mean that a single person under 35 will only qualify for a shared accommodation rate.
- Low income – this may well be the case if someone is self employed – or simply forced into part time work or a zero hours contract.
- Another traditional market for room lets and house shares in general has always been people coming from abroad to work or study, or simply learn the language. Again, this is a market that has increased during the economic downturn, while the UK economy has fared better in relative terms than some other EU countries.
- Professionals – some prefer to live in a high end house share (either as a lodger, a joint tenant in a house or flat share with other tenants, or in an upmarket HMO) and pay a high rent (in some parts of London, a high spec room in a desirable location can cost as much as the rent of a whole flat in a cheaper part of London) – in exchange for living in a very desirable property without responsibility for maintaining it, in a better area much closer to work.
- Midweek lodgers – professionals and other workers who live some distance from work, so rent a room near work during the week, returning home weekends and holidays. This has been a rising trend over the past decade, spurred on by the credit crunch, which has seen professionals who might previously have bought a “crash pad” in town near work renting rooms instead, and other workers of more modest means forced to accept work away from home.
- Again spurred on by the economic downturn, there’s an emerging trend for elderly people who might otherwise move into sheltered housing, to take in lodgers who do jobs for their landlord and offer companionship and the reassurance of having someone else around, in exchange for accommodation.
So that takes care of the “who” and “why”,, but what about the “where”? Naturally, if accommodation – for almost all markets – is near transport and amenities, it is going to be more rentable – shared accommodation is no different. However, this doesn’t mean that someone with a spare room in a more remote or rural location can’t attract a lodger. For example, someone who works or studies at home at least part time may well appreciate an attractive, quiet rural location. Having said that, even rural areas can still be near employment – farmers often employ temporary workers on a seasonal basis, or someone with a spare room might consider letting their room during the holiday season (no, meals don’t have to be supplied – most hotels only offer breakfast as a paid optional extra).
So how do you avoid a terrible housemate?
All landlords need to conduct due diligence in selecting tenants. New landlords often fall down on this through ignorance and inexperience – however, live in landlords often not only fall into the newbie landlord trap, but a large number of them actually believe that running a reference check against a lodger is excessive!
While this may well be true if the lodger is someone you already know – though this scenario can present its own Letting to a Friend problems- I can’t believe that people actually accept total strangers they know next to nothing about, and not only trust them to provide a large portion of their income, but allow them the run of their homes and share living space with them from day one! Unbelievably, this even includes people with children in the home. Sounds hard to believe? This was what I discovered during my year of research for my website.
Naturally, people who fail to adequately check their lodgers sometimes end up with rogue lodgers who might fail to pay rent, damage their homes, steal and/or flout vital house rules. This in turn does absolutely nothing to encourage others who might let out their spare rooms to do so – at a time when the housing crisis is worse than ever!
Another crucial aspect of due diligence is to set up a written Lodger Agreement and pre-agree the House Rules which is crucial if you want a lodger you get along with you and want to carry on that way.
For anyone wanting to share a house, but isn’t sure about what might be an issue get them to try my unique Lodger Quiz’
Referencing involving a full tenant check including a credit check, is absolutely crucial and as long as the proper preparation and due diligence is done, not least on yourself, renting out a spare room can be a rewarding way to earn a passive income.
For comprehensive advice on all aspects of renting a room, in all parts of the UK, please visit: lodgersite.com