If you don't need your driveway, somebody else will pay you for it

Motorists will fork out for parking. Greg Walton and Julian Knight report

In most of Britain's big cities and near mainline railway stations elsewhere, parking is at a premium. Some central London car parks charge more than £350 a month for spaces and even outside the capital monthly fees of over £150 are common.

But the motorists' misery could be the homeowners' money-spinner, as those with a driveway or garage can rent out their little bit of tarmac for a tidy profit.

The first thing to take into account when renting out a drive or garage is how often you actually use it. If you don't have a car, it's unlikely to be a problem. But if you do, you will have to park elsewhere while your drive or garage is rented out. This may involve finding parking close to work or buying a resident's permit. Secondly, you have to find the right tenant. Some take out adverts in local papers or put postcards in a newsagent's window; others advertise online through general listings websites such as craigslist or gumtree. A more focused way of finding a tenant is through sites such as Parkatmyhouse, parkonmydrive, yourparkingspace and parklet.

These sites promise to put tenants and landlords in touch and offer useful advice and tips. Yourparkingspace is free to use; parkonmydrive charges an annual £5 fee while Parkatmyhouse and Parklet charge 15 per cent commission on the rent paid in return for extra services.

Parkatmyhouse, for instance, offers a downloadable contract for both parties to sign and a mediation service in case of disputes. The site also offers an online space booking service which reduces hassle for the property owner.

All the websites encourage people to give as much detailed information as possible, including precise measurements, whether it is covered, any extra security, when space will be available and any minimum rental period.

Members then set their price and preferred payment method and can even add their own services such as refreshments or return airport transfers for holidaymakers to entice potential customers. The most successful listings on the sites carry photos.

However, there are tax issues that people renting out have to be aware of, as Andrew Bennett at HM Revenue & Customs (HMRC) says: "It should be taxed like any income if you're already earning above the personal threshold. If it is irregular, say a couple of days during the Olympic Games, then I don't think it would be an issue. But if the space was regularly let out to a commuter, for example, then that would be a different issue."

Another concern is who would be liable should something happen to the tenant's car. Erica Nelson at Direct Line says: "In cases of rented driveways, the car owner would have to prove that the homeowner was negligent in causing damage to the vehicle. However, home insurers might not cover a claim for damage to a car, as it could be considered a 'business use' and therefore excluded."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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