On your marks! Get set to let your spare room during the Olympics
Take advantage of government schemes that allow you to add to your income without having to pay tax.
Sunday 20 March 2011
The race is on for Olympic tickets. With millions of Britons having a month to apply for their favourite events, no doubt many people's minds will be turning to where they will stay during the games.
It's no surprise that many homeowners in Stratford and the surrounding areas of east London are eyeing up the opportunity to let out rooms and flats for the duration.
But the accommodation could be for anything – from the royal wedding to Badminton horse trials and carnivals – and more people in these credit-tightened times are looking to rent a room or their whole property for a special occasion.
Several things need to be taken into account if you want to do this, such as getting in touch with the council and your insurance company as well as contacting HM Revenue and Customs and your mortgage lender.
The procedure for short and long lets is the same. Matt Hutchinson of spareroom.co.uk says: "Some mortgage contracts have clauses which preclude subletting and you should check this carefully and get in contact with your mortgage provider. Your insurance company may have to arrange extra cover and you may have to pay more council tax."
A tax break is in place to help you to maximise income and you can save even more if you are diligent with keeping detailed records of income and outgoings. The rent-a-room scheme allows you to earn up to £4,250 per year while letting a room in your own home without incurring any extra tax.
The Government says you can take advantage of the scheme if you let furnished accommodation – a room or an entire floor of your home – to a lodger who pays to live in your home, sometimes with meals provided, and who occasionally shares the family rooms.
Under the rent-a-room scheme terms and conditions of a mortgage contract will not usually be breached, but problems can arise if you are letting a whole property. Jane Chichester, a spokeswoman for the Council of Mortgage Lenders, says: "Many lenders will say if you are letting your property for just a couple of weeks, then it does not matter. Others might levy a charge. If you are letting your house for longer, or if you are not there, then it becomes a buy-to-let. The risk becomes different because you are no longer an owner-occupier."
The scheme also applies if you are subletting, but you cannot use it if your home is converted into separate flats that you rent out, if you let unfurnished rooms, or if you rent out the whole house. Here you must declare rental income to HMRC and pay tax in the normal way.
"For people who want to rent out a room in their own home, the Government's rent-a-room scheme provides a welcome tax break," says Camilla Shaughnessy of short-term property let specialists Eventful stays.com. "For letting a holiday or second home all income is liable to tax, but this can be offset by deducting other income. So you keep a record of all heating and utility bills and other outgoings and this can be deducted from the tax you pay. In this situation you will also need to arrange some public liability cover. For most four-bedroom homes we would recommend £1m of cover. This will cover you against accidents and injuries when someone is staying in your home."
Using your home for a commercial reason such as letting it or having a tenant is unlikely to be covered by most standard home contents policies. "At the very least, consumers should inform their insurer," says Emma Parker of the Financial Ombudsman Service, the free service set up by law to handle consumers' financial complaints.
"It is also common for there to be exclusions under home contents policies in relation to items that go missing when someone is legally entitled to be in your home – such as a houseguest." Accidental damage may be covered depending on the policy terms and conditions.
"The insurer will decide, depending on the circumstances, whether or not the existing policy remains valid to cover the new arrangements," says a spokeswoman from the ABI. "Effectively, if you rent the entire property out, this could then be seen as a business arrangement and domestic home insurance policies may not cover this. Insurers may charge an extra premium for the duration of renting the property out, or a separate, small commercial policy may be needed on top of the usual policy. It is also worth bearing in mind that the risks will be greater if the owner is not staying in the house as opposed to just renting a room out."
Says Emma Parker: "We see few complaints about this issue, but where we do, typically the consumer is disappointed that a claim has been turned down as the insurance company says that the consumer has not 'disclosed' important information. We're unlikely to uphold a complaint like this if a consumer has not given honest answers to clear questions."
People who wish to let their family home to three or more unrelated tenants may also find they are restricted from doing so by their local council, by planning permission laws called Article 4 Directions. The National Landlords Association has criticised authorities wishing to do this and has launched a campaign claiming the "administration will be disproportionate to the benefit and reduce the available resources in this time of austerity that are needed for tackling more pressing issues facing local communities".
Chris Knight, a spokesman for the NLA, says: "This could have an impact on short terms lets for the Olympics – but the only London borough pursuing this is Redbridge. It means that people wishing to let even in the short term here will technically have to apply for planning permission from the council. But in practical terms it is unlikely the town hall will go on a prosecution spree after the Games."
Gareth Lewis, 52, business consultant
Gareth Lewis from Islington hopes to rent out his four-bed flat for £1,500 a week for holiday periods, but hopes to get nearer to £2,000 a week during the Olympics. Camilla Shaughnessy from Eventfulstays.com gave him the idea when they met on holiday in Toulouse in France. "And like all these ideas it gestated for a while," he says. Renting out your home while you go away can help to cover the cost or even pay for a holiday. "Now I plan to let my flat regularly when I go away. I'm going to Venice in half-term in October and have got a let arranged for then."
It is not just a flat you may want to consider letting. Raj Joshi is a 64-year-old council worker from Cardiff who rents out the parking space in the front of his house during major sporting events at the Millennium Stadium. "For an extra charge I am happy to drive people to the game," he says.
Rain doesn't stop profits at Andy Murray's £600-a-night hotel Cromlix House
Think twice about investing in fine wine - it's a vintage ploy for the fraudsters
Five Questions On: GB Energy's new tariff
Santander's Kitti app aims to bring the good old cash kitty into the 21st century
Bank-beating exchange rates on your international payments
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Tom Cruise: Reporters banned from asking actor about Scientology
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks traffic on Dublin road
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...
Day In a Page
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.