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Middle-Classes Beat The Mortgage Blues By Taking In A Lodger

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http://www.dailymail.co.uk/news/article-1314745/Middle-classes-beat-mortgage-blues-taking-lodger.html

'Increasing numbers of middle-class couples are taking in a lodger to beat the recession.

More than 200,000 young couples have lodgers, a 15 per cent rise in three years, a survey has found.

The 21st century trend is for rooms to be let out by couples in their thirties who need extra help to pay the mortgage.[/

John O'Roarke, of LV=, the insurance company that published the report, said: 'There has been a significant surge in homeowners taking in lodgers to make ends meet.'

Owners who bring in lodgers are taking advantage of a tax break that allows them to earn £4,250 a year in rent, free of tax.

The report, based on a survey of 1,500 people, said there are 210,000 homes with lodgers, who pay on average £4,700 a year in rent. It means that they can charge a lodger £350 a month for a single room or a floor of their home, provided it is not divided into a separate flat, without facing a tax bill.

Some 37 per cent of people taking in lodgers say they need help with the mortgage. Seven per cent took in a lodger after losing their job.

The typical landlords are a young married couple aged 25 to 40, with a middle income or more, who take in a single lodger they know socially.

Matt Hutchinson, of spareroom.com, said the website had had the highest number of adverts seeking lodgers placed in any one month (6,000) since its creation in 2004.

'We've seen a huge increase in the over-50s taking in lodgers, as they face the growing cost of putting their children through university,' Mr Hutchinson said.

For students, a room in a house can cost £348 a month, compared with £409 living in halls, according to flatsharing website easyroommate.co.uk '

I watch spareroom,gumtree,easyroommate etc in addition to rightmove to keep an eye on rents and prices in general.what's surprised me over the last few months is the apparent desperation of some advertisers eg one lady with two teenage daughters letting a room with bills in for £200pcm in a not too bad area.thus far her advert is still up 3/4 months later.all that inconvenience for £150pcm net of bills??

I aslo notice that a lot more LL's are trying to rent the rooms separately via spare room type sites as they can't rent via rightmove(ie seen them on there for months),so if you're savvy and lucky you could have the whole place to yourself for months.

other trends I've noted,besides increase adverts,are prices tipping slightly downward.more,OO's in nice areas pricing at the same level as the OO's in worse areas leaving the latter empty.

anotehr aspect of this is that a lot of people opt to lodge instead of renting a one room flat.the quality of some of the houses is such that £300pcm bills in is a lot better option than £300pcm plus bills for a crappy studio flat in a less than salubrious area.I'm seeing a lot more one bed rentals sit on rightmove for months.....as ever at the same price -no reductions yet but I see it as a matter of time

Its money for old rope. I have a 4 bed of which I have frequently let 2 rooms to people on a Mon-Fri basis (professionals with homes beyond commuting distance). Often I have been away on business in the week so little interference with my life.

Anyway in just under 4 years cleared inexcess of £20K in rents without worrying the tax man. Used all of it to pay down the mortgage.

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http://www.dailymail.co.uk/news/article-1314745/Middle-classes-beat-mortgage-blues-taking-lodger.html

'Increasing numbers of middle-class couples are taking in a lodger to beat the recession.

More than 200,000 young couples have lodgers, a 15 per cent rise in three years, a survey has found.

The 21st century trend is for rooms to be let out by couples in their thirties who need extra help to pay the mortgage.[/

John O'Roarke, of LV=, the insurance company that published the report, said: 'There has been a significant surge in homeowners taking in lodgers to make ends meet.'

Owners who bring in lodgers are taking advantage of a tax break that allows them to earn £4,250 a year in rent, free of tax.

The report, based on a survey of 1,500 people, said there are 210,000 homes with lodgers, who pay on average £4,700 a year in rent. It means that they can charge a lodger £350 a month for a single room or a floor of their home, provided it is not divided into a separate flat, without facing a tax bill.

Some 37 per cent of people taking in lodgers say they need help with the mortgage. Seven per cent took in a lodger after losing their job.

The typical landlords are a young married couple aged 25 to 40, with a middle income or more, who take in a single lodger they know socially.

Matt Hutchinson, of spareroom.com, said the website had had the highest number of adverts seeking lodgers placed in any one month (6,000) since its creation in 2004.

'We've seen a huge increase in the over-50s taking in lodgers, as they face the growing cost of putting their children through university,' Mr Hutchinson said.

For students, a room in a house can cost £348 a month, compared with £409 living in halls, according to flatsharing website easyroommate.co.uk '

Older people taking student lodgers was common once. We called it living in 'digs'. In the late 60s I lodged for a year with an elderly lady for something like £3 a week, inc. breakfast and evening meal. Hall would have cost around £7 - I could never have afforded it.

She gave me some 'interesting' things to eat, though. Once she gave me some cold meat that looked a bit like tongue but paler - wasn't very nice but I ate it anyway.

'D'you like that, love?' she said.

'Yes,' I lied politely. 'What is it?'

'Udder.'

:o:o:o

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Have you tried finding a high quality rental property for a decent price recently? Pretty much impossible here in Leicester where I'm currently renting a 2 bedroom semi detached property for 700 pounds a month.

Not sure how things are in general in London but my 2 bedroom flat rents out for 1400 pounds a month whereas the interest on the purchase price would be less than 500 pounds based on my life time tracker rate.

Renting seems very expensive to me. Buying is very expensive too but I think rents will probably keep on climbing as aspirational people clammer to get out of crap areas into good ares at any cost. Crap areas might become crapper.

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makes a lot of sense.adn I have to say I'd rather lodge in a nice hosue that's someone home(wouldn't fancy the big multishare jobbies) than rent an awful flat.some of the flats I see on RM are shockingly expensive for a crap part of town and unsurprisingly empty long term.

for too long LL's have got away with serving up expensive sh*t.nice to see the market biting back

I sort out all the utlity bills, cleaning etc that I would have to do anyway. Lodger simply pays the monthly rent. I charged £300 and £260 per calendar month respectively all bills included.

During the same period the mortgage has never been more than £530 a month B)

Win win for both parties.

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I've been telling you all this was going to happen for a couple of years.

No-one ever listens.

Probably on average 1 in 3 houses has an empty bedroom. Probably 1 in 4 has an empty double bedroom.

There is massive unused capacity out there that will come on stream as soon as people start getting short of cash.

The lodgers market is going to pull the rug out from under the rentals market completely.

Eventually the only people renting a whole house will be LHA claimants.

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I've been telling you all this was going to happen for a couple of years.

No-one ever listens.

Probably on average 1 in 3 houses has an empty bedroom. Probably 1 in 4 has an empty double bedroom.

There is massive unused capacity out there that will come on stream as soon as people start getting short of cash.The lodgers market is going to pull the rug out from under the rentals market completely.

Eventually the only people renting a whole house will be LHA claimants.

Was talking with my parents about this last night. My dad is a former hospital pharmacist and gets an NHS pension. Both parents get a state pension.

IN the event UK goes all Argentina and pensions get stopped frozen / not paid was looking at contigency plans - they have two room that could easily be let on the same basis. Garden could also be let out on a crop share basis.

Wheres that tin foil ;)

Edited by Kurt Barlow

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I've been telling you all this was going to happen for a couple of years.

No-one ever listens.

Probably on average 1 in 3 houses has an empty bedroom. Probably 1 in 4 has an empty double bedroom.

There is massive unused capacity out there that will come on stream as soon as people start getting short of cash.

The lodgers market is going to pull the rug out from under the rentals market completely.

Eventually the only people renting a whole house will be LHA claimants.

most people would rather not rent a room in somebody's house. Some would but most won't.

Most families won't rent a room even if they are strapped for cash. Some willo but most won't.

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Have you tried finding a high quality rental property for a decent price recently? Pretty much impossible here in Leicester where I'm currently renting a 2 bedroom semi detached property for 700 pounds a month.

Not sure how things are in general in London but my 2 bedroom flat rents out for 1400 pounds a month whereas the interest on the purchase price would be less than 500 pounds based on my life time tracker rate.

Renting seems very expensive to me. Buying is very expensive too but I think rents will probably keep on climbing as aspirational people clammer to get out of crap areas into good ares at any cost. Crap areas might become crapper.

Hope my LL doesn't see this - same price as I pay for 4 bed det with d/garage in a nice area of Leicester.

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most people would rather not rent a room in somebody's house. Some would but most won't.

Most families won't rent a room even if they are strapped for cash. Some willo but most won't.

You would be supprised how attitudes change when the bills need paying.

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Got to worry about so many people struggling on such low interest rates ....

Where will it all end? With sensible property prices? Well, after reading all that I am not looking forward to finding faginHalls.co.uk for folk with no home but time on their light fingers (sausage and mustard dinner included)

Edited by plummet expert

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most people would rather not rent a room in somebody's house. Some would but most won't.

Most families won't rent a room even if they are strapped for cash. Some willo but most won't.

That's why we have "supply and demand" HPI.

  1. People get richer

  2. People have higher expectations

  3. ... including their own place to live ...

  4. So demand for housing rises

  5. Lots of new flats built - a big step up for people who would've been in digs in the past

  6. But tax breaks and speculation turn them into a bubble and inflate prices

  7. So people can't or won't afford them

  8. And UK builders are accustomed to the "low cost" mantra and doing a shoddy job

  9. So as with every round of post-1945 UK housing, they get a bad name. People want better ...

  10. Some people revert to digs

  11. A new equilibrium may be reached ...

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Older people taking student lodgers was common once. We called it living in 'digs'. In the late 60s I lodged for a year with an elderly lady for something like £3 a week, inc. breakfast and evening meal. Hall would have cost around £7 - I could never have afforded it.

She gave me some 'interesting' things to eat, though. Once she gave me some cold meat that looked a bit like tongue but paler - wasn't very nice but I ate it anyway.

'D'you like that, love?' she said.

'Yes,' I lied politely. 'What is it?'

'Udder.'

:o:o:o

Hehe, yes. This arrangement had more or less disappeared when I was at university (early 90s) but some still did it. The trouble was the landlords/ladies tended to be 'Rigsby' types who thought they had to act in loco parentis. One even tried to talk a friend out of moving into a flat with his girlfriend on moral grounds (the loss in rent obviously had nothing to do with it... :lol: )

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You would be supprised how attitudes change when the bills need paying.

Yes. It all depends how they look at it. In the last recession I saw a few places billed as 'flatshares' (it was the height of the 'Friends' era) which were nothing more than digs to help cash-strapped couples. Some made out it was all fun and games, with others it was clear they didn't like renting out the room but had little choice. People will rationalise this by saying it is helping them pay the mortgage and 'move up the ladder' etc.

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I took a room with a couple once. He was unemployed and the mortgage needed paying. They were desparate for help so it worked out great for both of us. Lovely couple. But it demonstrated that it was desperation rather than a free choice decision that made it happen.

With low low interest rates its pretty dire if these folks can't afford the bills. Finding good lodgers is not an easy game either. In the city I can imagine its got more choice, but in the real suburbs???

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I've seen quite a few of these - for instance people building a tiny flat on top of a garage and trying to rent it for about the same as a "full" one bed flat.

Yes, I'd really like to live above your garage and park on the drive of your house (as long as you don't have friends round of course), and feel like I'm being watched 24/7, for the same money as a flat.

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I've seen quite a few of these - for instance people building a tiny flat on top of a garage and trying to rent it for about the same as a "full" one bed flat.

Yes, I'd really like to live above your garage and park on the drive of your house (as long as you don't have friends round of course), and feel like I'm being watched 24/7, for the same money as a flat.

I believe you don't get the tax break if its a flat, as described (own entrance?). Only if you are renting a room in the house in which you live.

I wonder if people are being a bit cheeky with the tax laws.

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Lad and his wife opposite do this.

On to their 3rd since last year. Funnily he is an estate agent - ah the justice.

Brought their place 3 years ago for £179k have been doing it up, 'in need of modernisation' i think the term he has probably used in his line of work.

Houses are now selling in a modernised state for £185k.

No wonder it seems like it is taking rather a long time to do the front garden up. Still he seems to get a decent amount of time off work to wonder about the morals of the industry he works in. And believes in, or maybe not.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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