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fru-gal

Changes To The Benefit Cap For Single People And The Increase In "rent A Room" Tax Threshold

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The benefit cap for single people will be reduced to £15,410 (London) and £13,400 (regions). At the same time the "rent a room" tax threshold is being moved up from £4,250 to £7,500 per year. This is likely to mean more single people moving into spare rooms in residential homes, perhaps reducing demand for HMO's/multi-occupancy flats/bedsits/1 bed flats/student flats. There are a hell of a lot of spare bedrooms out there in pensioner and boomer houses and many of them will be looking to top up their income, tax free. Every little helps.

Edited by fru-gal

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Living in an HMO is bad, but I reckon being a lodger would be worse.

Not the direction we should be going in. Where are the companies setting up blocks of professionally managed one-beds or even en-suites? They seem restricted to the student market.

Even that's admitting defeat, when thirty years ago a family home could be bought on a single salary.

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The benefit cap for single people will be reduced to £15,410 (London) and £13,400 (regions). At the same time the "rent a room" tax threshold is being moved up from £4,250 to £7,500 per year. This is likely to mean more single people moving into spare rooms in residential homes, perhaps reducing demand for HMO's/multi-occupancy flats/bedsits/1 bed flats/student flats. There are a hell of a lot of spare bedrooms out there in pensioner and boomer houses and many of them will be looking to top up their income, tax free. Every little helps.

Are you sure? That appears to amount to a net benefit transfer from single people -> hmo operators, pensioners and people in houses with extra rooms.

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The problem with rent a room, the tenant has to be tidy has to be back at a certain time and polite to live there, how many graduates would be able to cope.

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How many people actually declared the lodger's payments to HMRC in the first place?

This might just encourage some people to be more compliant. Doubt it will increase provision.

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I didn't see that in the budget

i will have to work out what i would be entitled too.

Single male on jsa

renting 1 bed flat on HB

(not claiming just like to keep abreast of my safety net)

1 bed flat say £600 mnth £7200

52 weeks of JSA £3790

yeah would leave a couple of grand leeway

can't see that hitting any single people outside London.

Does anything else come into your allowance like council tax relief etc?

Edited by workingpoor

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Living in an HMO is bad, but I reckon being a lodger would be worse.

Not the direction we should be going in. Where are the companies setting up blocks of professionally managed one-beds or even en-suites? They seem restricted to the student market.

Even that's admitting defeat, when thirty years ago a family home could be bought on a single salary.

HMO is expensive, compared with sharing it could be a worse option but lodging depends on the land lord. This isn't going to be as bad if you are lodging with someone of a similar age. There are plenty of single people in their 30s with spare rooms.

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We bought a bigger house than originally intended with the intention of letting a room to a student. It's worked out well so far and the rent charged pretty much pays our mortgage. The increase in the Rent-a-room allowance is most welcome and makes all our rental income tax-free. What's not to like?

Edited by the gardener

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when I were a lad (and slightly older) a bedsit/single room with a rigsby landlord /landlady was the norm - no one bed flats with kitchen and bathroom - only shared facilities - and the rent was low but it was paid for out of low wages.

interestingly the single benefit cap outside London is about the same as my income as a single pensioner. But out of that I pay tax and council tax so unless bedsit rents are particularly high - it does not seem too much of a hardship (they could always work part time and beat the benefit cap).

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Living in an HMO is bad, but I reckon being a lodger would be worse.

Living in a home that's good enough for your landlord/landlady is worse than living in one that isn't?

Yeah, right. Guess you've never encountered a proper slum.

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Out of choice I would rather rent a room in someones home than in a HMO.......I have rented out a room before to help with the bills and it worked out really well.

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Living in a home that's good enough for your landlord/landlady is worse than living in one that isn't?

Yeah, right. Guess you've never encountered a proper slum.

I have heard a lot of horror stories about live-in landlords and landladies. Being expected to entertain or babysit children, having your room 'inspected', dragged into family disputes or arguments with the neighbours.

It's not your space, it's theirs, and they're right there to micromanage it for you.

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No it was moved from 25 to 35 some years ago now around 2008/9

up to 35 you only qualify for a single room on HB

over 35 you qualify for a 1 bed flat HB

under 21 you get no HB at all

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I have heard a lot of horror stories about live-in landlords and landladies. Being expected to entertain or babysit children, having your room 'inspected', dragged into family disputes or arguments with the neighbours.

It's not your space, it's theirs, and they're right there to micromanage it for you.

No security of tenure if you're a lodger. You can be asked to leave at anytime.

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Mortgaged BtL have long taken advantage of the fuzzy status of their 'enterprises' which removed the risk from their businesses by not treating them as businesses and but more like someone renting their back bedroom out. So this budget has done a bit of rebalancing and given genuine lodger-seekers an incentive which I don't think is an inherently bad thing.

It absolutely doesn't suit everyone to live in someone else's house and I'd guess that young graduates are often not going to be good candidates because it will feel like they don't have 'freedom' (although they might well do better in a liberal lodging situation than actually moving back in with parents) - you have to know yourself and do a bit of mature assessment.

It's doubtless a finite market but living in someone else's house doesn't have to be a bad power relationship, careful compatibility choices need making: I lived in someone's back bedroom for nearly 10 years while I qualified and that worked out very well for both of us. Given the relative (compared with pre-Thatcher) insecurity of 'proper' tenancies, it's not necessarily insecure to be a lodger and the upside is you can walk with little complication if you decide it's not for you.

Some of the parasites who have emerged in the lettings markets are bypassed as well: people don't trust agents to find someone to share their own house.

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With consent get a bank status enquiry cost a few pounds and/or work reference.....any guenine lodger would be happy to comply.

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Horses for courses, really. It suited us when my son had to find accommodation to study at an FE college further than commuting distance away.

No complications with estate agent's fees, having to sign up for a whole year of utilities when he was only there for two spells of nine months (and home most holidays, inc. half terms), landlord withholding deposit, all that guff. Plus his landlady is more than willing to give him a reference when he finally gets thrown out wants to leave and rent his own place.

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Living in an HMO is bad, but I reckon being a lodger would be worse.

Not the direction we should be going in. Where are the companies setting up blocks of professionally managed one-beds or even en-suites? They seem restricted to the student market.

Even that's admitting defeat, when thirty years ago a family home could be bought on a single salary.

As a student I have done both. Being a lodger has pros and cons usually cheaper and easier to get out of.

Disclaimer I have had deliberate lodgers in the past (ones I looked for) and have an accidental one now (one who asked to stay with us).

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Yes, it's probably fine if you're a student or just starting out. I wouldn't be a lodger (I have enough trouble tolerating my perfectly normal and considerate housemates, without adding a power imbalance) - but I'm not really too fussed about this tax change and I have no objection to people lodging when it suits them.

But what I do have a problem with is the idea that this will do anything to solve the country's housing problems. Look at this change in context with the direction of travel of 'young' people's entitlements to the minimum wage and to housing support and it appears that we are headed for a country where nobody under 35 has their own private space.

There comes a point when adults need their own place, and 35 is far far too late. The older you get and the more you move around the less you have in common even with people of the same generation, never mind a live-in landlord or landlady.

Older people have once again won the housing lottery. Big family homes (bought when it was possible to raise a family in your own home), now become additional sources of income.

I can't see how increasing the number of rooms available for lodging does anything but encourage more people into smaller spaces than they need. And I look at my colleagues who are having babies at the moment, and I wonder if they shouldn't be planning to have a 'lodger' for the next forty years or so. Never mind where they'll put the grandkids.

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Yes, it's probably fine if you're a student or just starting out. I wouldn't be a lodger (I have enough trouble tolerating my perfectly normal and considerate housemates, without adding a power imbalance) - but I'm not really too fussed about this tax change and I have no objection to people lodging when it suits them.

But what I do have a problem with is the idea that this will do anything to solve the country's housing problems. Look at this change in context with the direction of travel of 'young' people's entitlements to the minimum wage and to housing support and it appears that we are headed for a country where nobody under 35 has their own private space.

There comes a point when adults need their own place, and 35 is far far too late. The older you get and the more you move around the less you have in common even with people of the same generation, never mind a live-in landlord or landlady.

Older people have once again won the housing lottery. Big family homes (bought when it was possible to raise a family in your own home), now become additional sources of income.

I can't see how increasing the number of rooms available for lodging does anything but encourage more people into smaller spaces than they need. And I look at my colleagues who are having babies at the moment, and I wonder if they shouldn't be planning to have a 'lodger' for the next forty years or so. Never mind where they'll put the grandkids.

I agree.

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