How to make money from your home

The rent-a-room scheme allows tax-free revenue. Picture by Next.co.uk

The rent-a-room scheme allows tax-free revenue. Picture by Next.co.uk

0
Have your say

When shop manager Louise Paver took the plunge and bought her own home early last year, it was thanks to a series of financial sacrifices.

When shop manager Louise Paver took the plunge and bought her own home early last year, it was thanks to a series of financial sacrifices.

“I sold my car, cut back on eating out and I didn’t have a holiday for two years. I also moved back in with my mum for nine months, and that really helped me save for a deposit” says Louise, 28, whose two-bedroom terraced house in Leeds cost £87,000.

Although she was elated when she got the keys to the door, the mortgage and insurance payments, which top £500 a month, along with council tax and fuel costs plus a bill for a broken boiler began to get her down.

The route back to domestic bliss lay in making the house pay its way. “I heard about the rent-a-room scheme and thought I’d give it a try. I asked around at work and found someone that way,” says Louise, who charges her sharer £280 a month with all bills included.

“Luckily I get on really well with her and the extra money has made a big difference to me. I’ve booked a holiday abroad and I’ve splashed out on some new clothes and weekends away with my friends. It means I can have a life as well as my own home,” she says.

Thanks to the government’s rent-a-room scheme, Louise doesn’t pay tax on the payments she receives. At the moment, the threshold is £4,250 a year but from April this year, this tax-free allowance will increase to £7,500. You can advertise for a lodger via www.spareroom.co.uk or www.easyroommate.co.uk.

The trend for taking in a lodger is growing by 23% a year, according to Spareroom.co.uk and there are relatively few rules.

However, it will affect your council tax bill if you get the single-person discount unless your lodger is a student or you have a Monday to Friday “roomy” who pays council tax somewhere else. You must also inform your insurance company about your paying guest or it could affect any claims you make.

You can also use the rent-a-room scheme to let to holidaymakers and short-term visitors. This is especially beneficial if you live in a tourist hotspot. The most popular way of doing this is via Airbnb.co.uk or homestay.com. Some homeowners let rooms at peak holiday times or to tie in with events like the Ebor racing festival in York. The income qualifies for tax-free status although you will pay a booking fee to the host websites.

Those who live close to universities and language schools can also host foreign students under the rent-a-room scheme. Contact student accommodation services for advice on how you can be added to their database or register with homestay.com.

Here are some more tips on turning your home into a money spinner:

*Rent out your drive. If you live in a city or town centre where parking costs a fortune or your home is close to an airport or popular football ground, you could rent parking space. You can advertise on justpark.com, which is free to list but adds a 25% service charge to the rental price, which is paid by the driver. This company also administers the bookings and collects payment. Or you can list on parkonmydrive.com, which charges a £15 annual fee. Annual incomes of £1,000 a year are common with this money making scheme.

*Hire your home out for film and photo shoots. You can expect between £450 and £650 a day for a stills shoot and between £850 and £2,000 for filming. Lauren York is head of UK Locations, based in Leeds, and her books boast the most extensive range of properties in the north of England. They include everything from palatial homes and country cottages.

“Not all properties have to be aspirational as we deal with companies who want normal family homes but the rooms have to be big and preferably open plan. You have to get the crew in, which means you need depth,” says Lauren. “When you see these rooms on TV or in a brochure they will look average sized but they aren’t.”

Other requirements include plenty of parking for the crew. There are usually around eight people at a photography shoot and around 40 for a TV commercial. Visit uklocations.co.uk for more details.

Back to the top of the page