(1888PressRelease)
March 14, 2007 - Over the past six months alone, networking website Gumtree recorded a 38 per cent increase in 'room to rent' flatshare listings on their website.
The research has found that 30 per cent of mortgage holders said they could use the extra revenue a lodger would generate and that 12 per cent had thought about taking one in.
In a surprise finding, London and Glasgow came out as amongst the cheaper places to rent. Average rent in London was just £110 per week, compared to the UK average of £112. This apparent anomaly can perhaps be explained by the larger range of accommodation options available in London and the huge amount of competition in the city.
Matt Hutchinson is a spokesman for spareroom.com , a website that caters to the room rental market. He said that landlords and homeowners are increasingly looking at generating income from the lodger market.
Highlighting a move towards live-in landlords, he said many people "are buying a property specifically to rent out a spare room". There are also government tax breaks for people renting out rooms. The 'room for rent' scheme allows householders to rent out a room for up to £4,250 per year tax free, which equates to around £350 a month.
Some mortgage lenders are acting on this towards buying a property to rent out a room and are offering such landlords mortgages that will facilitate their initial purchase based on projected income. Mr Hutchinson says: "There are a couple of mortgage lenders who factor that in - they will add a certain amount of rental income onto your multiplier before you take the mortgage out."
Interestingly, he also feels that the British attitude towards renting a home is changing. In his opinion, people "don't really consider that they need to own their own property". As long as there are "nice" properties available, and if renting was a more viable option, then "they would be happy to stay renting". This echoes another recent report, from Alliance & Leicester, that also concluded the attitude of people in the UK towards rented accommodation was changing. According to that report, the rentals market is going to see growth of around 40 per cent by 2016.
