A Victory in the 2015 Budget

Raise the Roof logo

As most of you who’ve used SpareRoom in the past six years will know, we’ve been campaigning hard to get the chancellor to increase the Rent a Room Scheme tax threshold. We just found out he did just that in the budget, raising it from £4,250 a year to the £7,500 we asked for.

This is great news for renters – especially flatsharers. With around 19 million empty bedrooms in owner-occupied properties in England alone, we’re just not using our housing effectively. As we’re not building in anywhere near the numbers we need to, unlocking some of those rooms will make a big difference.

Here’s how:

  • Encouraging people to rent out their rooms means more supply – that helps keep rents down
  • There’s a huge demand for affordable rentals right now, especially rooms. This addresses that need head on
  • Average rents for people living with the owner are lower than traditional rents – good news for renters on a budget
  • Unlocking just 5% of those empty rooms would house almost a million people, that’s the equivalent of a city the size of Birmingham!

It’s great to see the government addressing the housing crisis with simple, effective measure that will make a difference to hundreds of thousands of people quickly, while they work out the longer term policy changes we need to fix the housing crisis for good.

Thanks to all of you who signed the petition or helped spread the word. We’d also like to thank the people and organisations who’ve supported Raise the Roof publicly over the past six years, including Shelter, Sarah Beeny and Generation Rent.
Great news all round.

Matt

How to solve the Housing Crisis in London

SpareRoom attended the Future of London Housing debate hosted by the Evening Standard on Wednesday 20th March, in a packed room of over 1000 attendees. Housing is clearly a subject that is close to the hearts of many Londoners and the debate and following Q&A session became quite heated – showing the passion and emotion involved.

All of the panellists, including thinkers and politicians from all sides of the political spectrum, agreed that more housing supply was needed to relieve the housing crisis enveloping London. Deputy Mayor for Housing, Richard Blakeway called for London’s share of stamp duty to be ploughed back into a massive house-building programme. Whilst the MD of Berkeley Housing proposed a simplified planning process, the former London Mayor, Ken Livingstone’s call was to provide council housing for mixed communities, so there is less segregation between rich and poor in London. Alain de Botton, philosopher and writer, suggested a blueprint for attractive, affordable design that could be repeated easily and efficiently across London, removing some of the hurdles in the planning process, whilst the broadcaster and architectural graduate Janet Street Porter called for high density building, across railway lines and over car parks, like in New York. Possibly the biggest applause of the evening went to Evening Standard columnist Rosamund Urwin’s suggestions of disbanding Foxtons, banning Kirsty Alsopp and deporting the Candy Brothers. Standing up for ‘renty-somethings’ she focused on her own case of being shut out of home ownership, and renting with family members.

Whilst many of their suggestions were valid and probably will help to resolve the housing crisis in a few years to come, if more intensive building programmes do get underway (we’ve only built half the number of homes we need for the last 20 years and have a lot of catching up to do), there was a distinct lack of focus on the here and now. With so many thousands of people on housing lists in London, and the capital attracting workers and students like never before, there is an imperative need to offer practical solutions to today’s housing crisis, before London becomes a place that no real people can afford to live and work in.

Sharing existing resources seems to be the elephant in the room that nobody would mention. Amongst the talk of pressing empty properties and even offices into homes for the needy, there is no mention of the thousands of under-occupied properties that can help to ease the crisis. This is already happening – as teenage children grow up and move away, ’empty nesters’ are starting to rent out their spare rooms in their thousands – but we need to see more of this, to make an impact. What could the policy makers do to help encourage this trend?

We would suggest a raise in the tax free limit homeowners can earn through the Rent a Room scheme for starters – it’s been at the same rate since its introduction in 1997, whilst rents have been rising dramatically. Why not make it more attractive for people with spare rooms to take in a lodger, and help to remove the pressure on the limited supply in the private rented sector, and the social rented sector too? We’ve been pushing for this with our Raise the Roof campaign for some time, and hope that the Chancellor may see fit to increase the tax benefit in his next budget, even if it wasn’t included in last week’s.

Other ways to increase supply include removing some of the hurdles involved in turning a property into an HMO. This will promote more efficient use of existing property, and help young people to find somewhere affordable to live in the here and now, rather than being told to wait for houses yet to be built.

Do you agree? What do you think could be done to help solve the housing crisis sooner, rather than later?

A lesson from EastEnders

Anyone who saw last night’s episode of EastEnders (and apparently there were 8.1million of us!) will have seen Dot Branning get into trouble over renting her home to a lodger without permission, and is now being investigated for housing benefit fraud.
Dot Branning is quizzed at Walford Council

As Cora Cross failed to pay the rent and unauthorised lodgers were staying under Dot’s roof, the council is seeking a full explanation of exactly what happened, and is threatening legal action.

If you’re thinking of taking in a lodger, or who have already done so, those scenes might have struck a worrying note with you. If you’re worried about how taking in a lodger might leave you open to issues with your local council, your mortgage lender or your insurance company, there’s a wealth of information on the SpareRoom website to help you. SpareRoom guides you through every aspect of taking in a lodger, and explains what your obligations are. You can also download a free copy of our Guide to Taking in a Lodger, which will get you off on the right foot.

Change to gas safety regulations come into force 31 Dec

There’s only 10 days to go before new regulations come into force which could affect all landlords with gas central heating in their rented properties. Read this now to avoid problems.

Landlords have an obligation to provide heating that is working and safe. If the heating breaks down or isn’t repairable, the result is unhappy tenants, even if you provide temporary heaters.
New regulations coming into force at the end of the year mean that it’s possible that gas safety engineers won’t be able to approve a boiler for use. This is because they must be able to check not only the boiler but the flue in its entirety. If they cannot gain access to the flue to check this, they won’t be able to issue a Gas Safety Certificate, and will have to shut down the system in the meantime. Result: unhappy tenants complaining to landlords.

What can landlords do to protect themselves and their tenants from this unhappy outcome?

If you’re not sure if the entire flue is visible and checkable, get an engineer out to have a look. Fit inspection hatches if there’s the least bit of doubt, as an engineer will be obliged to turn the system off if he cannot inspect the flue in its entirety.

For more information and frequently asked questions, visit the Gas Safety Register website at http://www.gassaferegister.co.uk/advice/flues_in_voids.aspx

Kindle an interest in Flatsharing

We’re pleased to announce that The Essential Guide to Flatsharing is now available for Kindle. Priced at a very reasonable £4.98, the book is now available to download from Amazon.

Whether you’re looking for a flatshare or renting out a room, The Essential guide to Flatsharing has everything you need to know. Written by Rupert Hunt, the founder of SpareRoom.co.uk, and Matt Hutchinson, SpareRoom’s resident expert, the book serves as a no-nonsense guide to the world of shared accommodation. It brings together the pair’s expert knowledge of dealing with flatshares, lodgers and landlords and shares tips and insights on how to avoid the pitfalls of sharing. From financial issues to living in harmony with your flatmates, this book covers it all.

Now available for Kindle for the first time, the guide will prove your stalwart friend and advisor as you travel through the maze of shared accommodation. Download a copy now!

Supporting Social Tenants during the introduction of Welfare Reforms

The Chartered Institute of Housing today launches a new guide aimed at helping its members deal with some of the issues raised by Welfare Reform, and in particular, the Bedroom Tax or Social Sector Size Criteria.  The rules come into force next April, and will mean that social tenants of working age with a spare bedroom or two will lose some of their housing benefit.

One of the options for impacted social tenants to cover the shortfall is to rent out a room, which will also serve to bring in extra income for the household.

SpareRoom has over a decade’s experience in helping people through the process of finding lodgers, and are pleased to be able to share some of our expertise. Beyond offering a marketplace to advertise for lodgers, we also provide information and guidance on many other aspects of the process including: who you need to inform, how to interview lodgers and what kind of house-rules to put in place.

The CIH worked with SpareRoom to produce ‘How To Support Tenants to Find a Lodger’, the latest in a series of How To guides.  It explains clearly and succinctly the ways that councils and housing associations can support their tenants in exploring the option of getting a lodger. As well as highlighting the changes coming into force, the guide sets out how social landlords can benefit from putting together a strategy to help tenants find lodgers, covers legal matters, financial matters including the impact on tenants’ benefits, and offers links to further resources such as lodger agreements, advertising tips and the Rent a Room Scheme, whereby anyone can earn up to £4250 per year tax free by renting out a room.

Practical suggestions cover how to communicate the options to tenants, as well as how to support tenants through the process of finding a lodger. In “Learning from others” the CIH highlights proactive organisations and what they’re doing to support their tenants to rent out their spare rooms.

‘How to support tenants to find a lodger’ is available for free download  from the Chartered Institute of Housing. Find out how to get a lodger to cover the bedroom tax shortfall.

Options for social tenants facing the Bedroom Tax

Changes to benefits are coming into force on 1st April 2013, which will affect the housing benefit entitlements of thousands of social tenants up and down the country.

Housing associations and local authorities have started to inform their tenants of the changes and their expected impact, but there is still much to be done to help social tenants make informed decisions about the changes and how to mitigate their impact.

New rules on under-occupancy will mean that people will receive less housing benefit to cover their rent, if they are deemed to be under-occupying their home. The government is seeking to save money and at the same time, encourage those with homes too large for their immediate needs to move to smaller homes, vacating the larger ones for growing families.

The under-occupancy rules will affect an estimated 670 000 households next April, and there are not enough alternative one bedroom properties for under-occupying couples and singles to move to.  In some parts of the country, particularly the North, the impact is likely to be felt more strongly, as a greater proportion of social housing stock is larger, due to fewer restrictions on space.

The average cost for each under-occupying tenant will be £676 per year, based on an expected £14 per week shortfall in housing benefit. When the welfare reform kicks in next year, tenants will face tough choices between paying for the shortfall in their rent through income, or downsizing. An alternative to this tough conundrum is for the tenant to take in a lodger. With their spare room filled in this way, they won’t be deemed to be under-occupying, and they have the capacity to make some additional income, whilst remaining in their own home.

Some local authorities and housing associations are starting to develop strategies to support tenants who wish to consider taking in a lodger. The tax and benefit implications are not straightforward, and it’s vital that social tenants get help to consider the wider implications of having someone unrelated to them living in their home.

SpareRoom has published The Social Tenant’s Guide to Taking in a Lodger, which is available for free download, and is intended to guide individuals through this potential minefield. Housing associations may also use it as part of their efforts to support tenants in their choice of action in response to the Bedroom Tax.

To download the free guide, visit http://www.spareroom.co.uk/bedroomtax

Room for Rent – Bills Included?

You might think that setting the rent you charge for your room is simple. You just pick an amount that:

  • covers your mortgage
  • gives you a profit
  • reflects the facilities, size and location of the room

Once you’ve done your research, including checking the SpareRoom Rental Index, you’ll know what the going rate tends to be in your area, and you can pick your figure. Right? Wrong.

There are two additional factors you need to consider when deciding how much to charge (and they could have a big impact on the response to your ads).

Bills Included or Excluded?

The most popular way to advertise on SpareRoom.co.uk is bills included. We recently polled our users, asking them how they prefer to see rents displayed in SpareRoom ads. The overwhelming response was with bills included in the amount (94%), with only 3% saying that they preferred to see the amount without bills, and the same percentage not having a preference either way.

Having bills included makes it easy for tenants and lodgers to keep a handle on their outgoings, so they know how much they can afford to then spend on more appealing things – food, clothes and going out! When bills are excluded, it’s unnerving that you could at any time be presented with a large bill you hadn’t planned for.

A quick search of our database reveals that only 14% of our rooms are currently offered exclusive of bills, which should keep most sharers happy!

Weekly or Monthly rent?

The second factor to consider is whether to offer your room with a weekly or monthly rent. Going by current trends, most room advertisers (66%) show a monthly rental amount, whilst 34% list rent weekly. But what do room seekers prefer? Weekly amounts look significantly lower, so it’s tempting to think that could entice them to click on your advert.

A room seeker, scanning a list of mostly monthly rents, might be tempted to click on a tantalizingly low figure. When they realise it’s a weekly amount and, therefore, not as low as it first seemed, they may feel slightly duped.

Our theory was that room seekers would overwhelmingly prefer to see monthly rents, especially if they’re receiving a monthly salary rather than a weekly wage packet. But then we analysed Room Wanted ads (placed by over a quarter of a million room seekers in the last year) and discovered that, in fact, only 60% express their budget in terms of monthly rent, with 40% choosing to state it in weekly terms.

So although there is a defined preference for monthly, it’s not as clear-cut as whether to include bills or not. Something for you to ponder, before you place your next room offered ad.

How to offset the shock of an increase in SVR

More than 1 million UK homeowners got a shock last week when 4 mortgage providers (Halifax, the Co-operative Bank, Clydesdale Bank and Yorkshire bank) increased their standard variable rates. NatWest also pushed up the rate on its One Account, affecting a further 100,000 customers.

With many homeowners already living on frozen salaries, and with tightened belts, this further increase in outgoings could be critical.

The general advice in this situation is to speak to your mortgage lender in the hope that they may be able to help. The earlier you let your mortgage lender know if you think you’ll struggle the better.

One practical way to offset increased outgoings is to take in a lodger. Not only will the £4,250 you can charge tax free under the Rent a Room Scheme be a huge help in these circumstances, you may also benefit in other ways. Having someone to water your plants or feed your pets while you’re away, for example. Friendship is often a happy consequence of taking in a lodger, and we’ve even heard about one or two marriages that resulted from it too!

Make sure you speak to your mortgage provider first, but taking in a lodger could give you the breathing space you need as SVRs increase. Visit http://www.spareroom.co.uk/lodger for more information.

Taking in a lodger #5 – Placing an ad as a way of testing the water

So you’ve done some research and considered what it is you want from a lodger. Now it’s time to place an ad. You may be thinking ‘But I’m not ready to advertise my room just yet’, and that’s fine. Advertising your room can be incredibly useful though as it can tell you several things you can only guess at otherwise:

  • Will anyone want my room? – Advertising can help you work out how many (and what sort of) people are likely to be interested
  • Am I charging the right amount? – If your room is too cheap (or too expensive) it’s worth finding this out so you can make adjustments
  • Is my ad any good? – You may well find you end up tweaking your ad as you go. The responses you get will give you an idea what you might not be saying that you should
  • How to deal with enquiries – Learning how to communicate with prospective lodgers can hep you get the kind of information out of them that’ll tell you whether they’re suitable or not

Of course, we wouldn’t suggest anyone puts up an ad if they’re not planning to rent out a room as that would just waste people’s time. However, advertising sooner rather than later gives you plenty of time to meet several people and find the right fit.