£63.4 bn to be made renting

Homeowners are missing out on an estimated £63.4 billion by not letting spare rooms out to lodgers, according to the latest research from Abbey.

The findings state over 18.2 million homeowners have at least one currently uninhabited spare bedroom sitting idle, which could be let at the national average of £289 a month.

This equates to £3,468 extra each year from a single room.

Furthermore, those joining the government's rent-a-room scheme can receive up to £4,250 tax-free 'gross' rental income a year (receipts before expenses).

"With income being squeezed in so many ways, those looking to raise some extra money may find that their spare room could provide the answer," explained Phil Cliff, director of Abbey Mortgages.

"Demand for rooms is likely to be fairly high too and with the government providing tax free incentives for landlords, now is certainly a good time for those considering taking in a lodger."

However, not everybody is missing out.

Abbey Mortgages' research estimates some 388,000 homeowners are already renting out one of their spare rooms, which is netting them combined £1.1 billion annually.

A further 1.6 million are seriously considering doing so - worth a potential £5.6 billion.

However, if you're a mortgage payer, Abbey Mortgages points out that while the vast majority of lenders allow you take in a lodger with the minimum of hassle it's always best to check both your mortgage lender's and insurer's terms and conditions.

The government Rent-a-Room scheme is an optional exemption scheme that lets you receive income from renting furnished accommodation in your only or main home. The full terms can be seen here.

Chris O'Toole