The pros and cons of getting a lodger

Chris Torney / 24 February 2015 ( 03 August 2016 )

There are many reasons people decide to have a lodger live with them. Some are looking to boost their income, others want the company and some extra help around the home. Here are some things you need to consider before you rent a room out to a lodger...



Many people whose homes have one or more spare bedrooms decide to take in a lodger.

This could be the case, for example, if your children have just left home or gone away to university

A lodger can provide not just extra income, much of it free of tax, but also companionship and even help with jobs around the home.

So if you are considering seeking a lodger, what do you need to think about?

Tax-free income

Under the government’s Rent-A-Room scheme, you can earn up to £7,500 a year free of tax from a lodger: this equates to rent of just over £144 a week.

Any rent above this level will be subject to income tax at your marginal rate and you will need to complete a tax return.

Are you allowed to take a lodger?

If you don’t own your home outright, there are steps you may need to take before advertising for a lodger.

If you have an outstanding mortgage, check with your lender whether you are allowed to take a lodger or if you need permission. And if you live in rented accommodation, check the terms of your tenancy.

If you have a spare room but don't want a permanent lodger, have you considered hosting foreign students?

Do you need extra insurance if you take in a lodger?

You should also contact your home insurer before your lodger moves in to inform them and pay any extra premiums if necessary. This might be the case if you have accidental-damage cover, for example.

Saga are able to help you organise your Landlord Insurance, if you wish.

Advertising for a lodger

You could advertise for a lodger in a number of ways, from placing an ad in your newsagent’s window, to using your local paper’s classified section or putting a listing on a website, such as Spareroom.co.uk.

Is it safe to take in a lodger?

If the lodger is not someone you already know, it makes sense to take certain precautions before allowing them to move in. This could involve seeking references from people they know or from their employer or bank.

You are not obliged to provide a written agreement if you take in a lodger, but it can help if you have a clear record of how much rent is to be paid, the size of any initial deposit, how long the lodger can stay for and how much notice you or they have to give to end the agreement.

You should also set out how household bills, such as utilities and council tax, are to be shared.

Finally, you are responsible for providing safe accommodation and also for having regular safety checks carried out on any gas appliances.


An increasing number of the over-50s are investing in rental property. Known as ‘grandlords’, they are turning to the rental and the buy-to-let markets to supplement their retirement income. For more information about becoming a landlord, download our free guide


The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.