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APRIL 05, 2016 | BY A & S Property

Rent A Room boosts rental supply

Almost a quarter of a million homeowners have advertised for lodgers since the Rent a Room scheme threshold was raised in the Summer Budget (July 2015).

The rules change on 6 April and mean homeowners can earn £7,500 a year tax-free by letting rooms, up from the previous limit of £4,250.

According to, since the announcement of the increase to the Rent a Room scheme tax threshold, almost quarter of a million (233,697) homeowners have advertised for lodgers. This is an increase of more than 5.2% on the same period a year earlier.

The data also reveals that August – the month following the Chancellor’s Summer Budget announcement – was the busiest since records began in 2007, with 31,109 people placing ads for lodgers.

London is the only major city where annual lodger rents are still higher than the new threshold. The next highest are found in Oxford and Aberdeen in Scotland - where average annual lodger rents (including bills) are over £6,000 but sit below the new threshold.
Matt Hutchinson, director of, said:  “Across the UK, room rents are rising by 5.5% a year. The abolition of tax relief on mortgage interest could force rents up even further as landlords look to cover costs, so this change to the Rent a Room scheme can’t come soon enough. 

“The UK is in the grip of a housing crisis nobody can see an end to. We’re not building anywhere near enough new homes so we have to make sure we’re using the ones we already have as effectively as possible. Incentivising even a small percentage of homeowners sitting on the 19 million empty bedrooms in owner-occupied properties to let them out would do just that. That’s why we campaigned for this change for six years and are delighted to finally see it come into effect.”

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