Rent a room in your home
1. Becoming a resident landlord
You're a resident landlord if you let out part of a property which is your only or main home.
If so, you’ll have certain rights and responsibilities:
- you’re responsible for keeping the property safe and in good repair
- a tenant or lodger doesn't have the right to challenge the agreed rent
- you may be able to earn £4,250 per year tax-free under the Rent a Room Scheme
- you can give less notice to end a letting than if you rented out the property as a whole
Ask potential tenants or lodgers for references and follow them up before signing any agreement. Read the guide about letting rooms in your home for more information.
2. The Rent a Room Scheme
The Rent a Room Scheme lets you earn up to a threshold of £4,250 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.
You can let out a room or an entire floor.
How it works
The tax exemption is automatic if you earn less than the threshold. This means you don't need to do anything.
You must complete a tax return if you earn more than the threshold.
You can then opt into the scheme and claim your tax-free allowance. You do this on your tax return.
You can choose not to opt into the scheme and instead record your income and expenses on the property pages of your tax return.
More information
Read the Rent a Room helpsheet for more detailed information on how to complete the form, and when it makes sense to opt out of the scheme.
Download 'Helpsheet 223: Rent a Room for traders' (PDF, 77KB)
Eligibility
You can opt in to the scheme at any time if:
- you're a resident landlord, whether or not you own your home
- you run a bed and breakfast or a guest house
You can't use the scheme for homes converted into separate flats.
3. Your lodger's tenancy type
The way you share your home with a lodger affects what kind of tenancy they have. This in turn affects their rights and how you can end the tenancy.
Your lodger is an excluded occupier
Your lodger is likely to be an excluded occupier if:
- they live in your home
- you or a member of your family share a kitchen, bathroom or living room with them
In this case, you only have to give them reasonable notice to end the letting - and you won’t have to go to court to evict them.
Your lodger has basic protection
Your lodger is likely to be an occupier with basic protection if:
- they live in your home
- they don’t share any living space with you or your family
If your lodger won’t leave when you ask them, you’ll need to get a court order to evict them.
The charity Shelter has advice on excluded occupiers and occupiers with basic protection.
The length of the let
A tenancy or a licence can be either:
- periodic - run indefinitely from 1 rent period to the next
- fixed term - last a set number of weeks, months or years
If you don't agree the length of a let, it will automatically become a periodic let.
Licences can be open-ended for informal arrangements, like allowing a friend to stay on an as-and-when basis.
4. Rent, bills and tax
Rent
You can charge what you want for rent but should agree the amount with your tenant beforehand. You can also ask for a deposit and you can accept Housing Benefit for rent.
You must provide a rent book for tenants who pay weekly.
Council Tax
You will be responsible for Council Tax and can include part of the cost in the rent you charge. You must tell your council if having a tenant means you're no longer entitled to a single person discount.
If you're unsure who should pay Council Tax, check with your local council.
Utility bills
If you pay the utility bills for the entire house, you can include a charge in the rent or install pre-paid meters.
You can only charge the amount you've paid for gas and electricity plus VAT or you could face civil proceedings. Read Ofgem's rules on the resale of gas and electricity for more information.
Income Tax
Income Tax is payable on rental income you receive.
If you're not in the Rent a Room scheme, you'll be charged Income Tax on any rental income you get after business letting expenses. Examples of business expenses include:
- insurance
- maintenance
- repairs (but not improvements)
- utility bills
If you're in the Rent a Room Scheme, you'll pay Income Tax differently.
Capital Gains Tax
You may have to pay Capital Gains Tax when you sell your home if:
- you let out all or part of it
- you've taken in more than 1 tenant or lodger at a time
However, you may be entitled to Private Residence Relief and Letting Relief.
Contact your tax office for further details.
Deposits
Resident landlords aren't legally required to protect tenants' deposit with one of the government-approved schemes.
Your local council may guarantee rent for a potential tenant who can't afford a deposit.
You may have to pay other taxes if you run a bed and breakfast, or provide meals or cleaning services for guests. Contact HM Revenue and Customs for more information.
5. Ending a letting
How to end an excluded tenancy or licence
If your lodger is an excluded occupier, you only need to give them 'reasonable notice' to quit.
Usually this means the length of the rental payment period  so if your lodger pays rent weekly, you need to give 1 week's notice. The notice doesn't have to be in writing.
You can then change the locks on your lodger’s rooms, even if they’ve left their belongings there. You must give their belongings back to them.
How to end a non-excluded tenancy or licence
If your lodger is an occupier with basic protection, you must serve them a written 'notice to quit'. The notice period will depend on the tenancy or agreement, but is often at least 4 weeks.
If your lodger doesn’t leave, you’ll need to get a court order to evict them.
Your lodger ending the tenancy
Your lodger can end the tenancy by giving you notice. They can’t do this during the fixed term of the tenancy, unless there’s a break clause.
The amount of notice they need to give depends on the tenancy agreement, if there is one. Otherwise, it’s usually at least 4 weeks (if they pay weekly) or 1 month (if they pay monthly).
You and your tenant can end a tenancy at any time if you both agree.
Change of ownership
If you stop living in your home, the tenants can still stay there, but their tenancy type may change to reflect that you no longer live there.
If you sell your home and the new owner plans to live in the property as a resident landlord, they must:
- give notice to a tenant within 28 days that they intend to live there
- move in within 6 months of the sale
Until the new owner moves in, tenants will have more protection through tenancy laws, because during this time there's no resident landlord. Their rights will depend on when they moved in. Find out about tenants’ rights in 'Private renting: tenancy agreements'.
If you die, a tenancy will usually continue as though you were still resident, until someone else takes ownership.
6. Houses in Multiple Occupation
Your property may be classed as an House in Multiple Occupation (HMO) if you let rooms to more than 2 people.
There are extra safety requirements and standards for HMOs and you'll often need a licence.