Two landlords - it's all about where you live
With The Times reporting recently on the government’s proposed plan for a register of landlords it’s probably time to look at what the difference between types of landlord is and how this should be reflected in how they’re dealt with.
In broad terms there are two types of landlord in the residential sector:
- Live Out Landlords – Regular landlords who rent out property they don’t live in
- Live In Landlords – Those who rent out a room (or rooms) in their own home to a lodger
As we see it the main distinction to make is one of vulnerability. With a traditional let the tenant is more likely to be vulnerable than the Live Out Landlord, whilst a Live In Landlord is more at risk than their lodger. Clearly we’re not suggesting that landlords have less scruples than tenants here as we know landlords do have problem tenants and can suffer as a result. Similarly we wouldn’t suggest that no lodger has ever had a rough time with their landlord.However, it’s important to recognise that a Live In Landlord is in a very different situation than his or her Live Out counterpart.
The law recognises this distinction which is why it’s easier to evict a lodger than a tenant. Live In Landlords also benefit from the Rent a Room Scheme, allowing them to earn up to £4,250 a year before having to declare the income or pay any tax. This limit is on the low side as the average room in the UK is worth more in rent than £4,250, but that’s another post in its own right!
In many ways a lodger is far more likely to get any problems dealt with as the landlord also has to live in the house and therefore is equally affected if, for example, the boiler packs up.
Obviously this distinction paints the situation with a broad brush. It’s right to legislate in order to make sure landlords deal with tenants in a fair and reasonable manner but, in a time when we’re being constantly told there’s a housing crisis, doesn’t it make sense to encourage homeowners to rent out a spare room without being subject to the same laws as Live Out landlords? Lodgers also help homeowners stay in properties in times of financial hardship and the last thing the government wants is even more mortgage arrears and reposessions. I think we should be encouraging people to take in lodgers and wonder whether over-legislating will simply stop people from doing so.