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Homeowners 'forced to consider renting rooms'
2 August, 2007
Research by propertyfinder.com has shown 24.6 per cent of homeowners would consider taking in a lodger to boost their income if interest rates rise further.
A further 19% said they would consider it if they could, but don’t have the space for one.
propertyfinder.com said the need for extra income is clear. The average outstanding mortgage in the UK totals £96,000. If the Bank of England raises interest rates to 6%, a typical borrower will have seen his mortgage repayments rise by £79 per month since rates began to rise. For new borrowers, the combination of rising house prices and rising interest rates means they will need to find an extra £156 per month compared to a similar borrower twelve months ago.
Warren Bright, chief executive of propertyfinder.com said: “Mortgage borrowers are feeling the pinch of higher repayments and many are looking around for sources of extra cash.
"There are at least 26 million spare rooms in the UK, on average that’s one for every household. Around half of these belong to those with mortgages.
"Of course, it’s a huge change to consider taking a stranger into your home so in practice, only a tiny proportion of homeowners would do it. However, for many people, especially for younger homeowners, those who live alone or who don’t have children, it can be a very attractive option. What’s more, there is tax relief available too. Under the government’s Rent a Room scheme, householders are allowed to receive £4,250 in income tax free if they rent a room to a lodger, equivalent to £82 per week.”