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Make your Lodger agreement

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Can you take in a lodger?

There are a number of practical points which you must consider before you decide to let out a spare room at your property, including:

  • mortgages - check with any mortgage lender that you’re permitted to take in lodgers

  • your tenancy agreement (or occupation contract in Wales) - if you rent your home, check that your lease allows you to take in lodgers

  • insurance - your lodger’s possessions may be covered by your contents insurance. If not, the lodger should have their own insurance

  • state benefits - if you currently claim any state benefit payments, speak to your benefits provider (eg Universal Credit), as taking in a lodger is likely to affect any benefits you’re claiming

How to take in a lodger

It is best to have a written agreement setting out the terms of your arrangement. For example, exactly what you expect from the lodger, how much rent they must pay, and which areas of the house they can and cannot use. You can use our Lodger agreement template to create your contract. If you are located in Scotland, you can use our Lodger agreement for Scotland.

If the room is being let furnished, you should also prepare a list of the items in the room (ie an Inventory) and set out the condition of the items when the lodger moves in. This is the best way to avoid any dispute when the lodger moves out as to what damage they may have caused. Make the inventory as detailed as possible and include all the items in the lodger’s room. Make sure you include the condition of carpets, curtains, doors, windows and light fittings.

If you are taking a deposit from a lodger, this does not need to be protected in the tenancy deposit scheme, but it is good practice to put it in a separate bank account. Speak to your bank about opening an appropriate ‘lodger deposit’ account.

Lodgers in Wales

Lodgers in Wales usually have the same general legal status as those in England and Scotland (ie the information above will apply). However, since the Renting Homes (Wales) Act 2016 came into force on 1 December 2022, it is also possible for lodgers to be contract holders. This means that they hold an occupation contract that sets the terms of their relationship with their landlord, which generally means they have enhanced rights (eg it’s often harder for them to be evicted or for them to leave the property). A lodger will only be a contract holder if the landlord notifies them that their contract will be an occupation contract before or when it is made.

Rent a room scheme

You can earn £7,500 per year (£625 per month) tax-free from letting out a furnished room to a lodger. This is halved if you share the income with someone else (eg your partner). You need to opt into the Government’s ‘Rent a Room’ scheme to receive this tax exemption, otherwise, you could pay tax on all of the rent you receive. Once in the scheme, you will only pay tax on rent earnt over the £7,500 threshold. 

Read Rent a room scheme and tax and see the Government’s website for more information.

Finding a lodger

Once you are ready to take in a lodger, you will need to advertise the room. Remember it’s not just the lodger’s room you are letting but also the whole property that they can use. Make the most of what you are offering: free wi-fi and a garden are all good letting features!

There are many online advertisement sites to help you let your room, which allow you to upload pictures and full descriptions of what you are offering.

Once you have found a lodger you may want to use a credit checking service to verify the lodger and take up references on the prospective lodger before moving on to signing a lodger agreement. 

If you are a landlord in England, you must check the lodger’s immigration status to make sure they have the right to rent. For more information, read Ending a tenancy due to immigration status. In Wales and Scotland, however, there is currently no legal requirement to check a lodger’s right to rent.

Remember, if you are thinking about letting a family member stay at the property, this does not constitute a lodger arrangement. Rather, it will generally be an informal family arrangement. It is usually assumed in these cases that there is no intention to create legal relations unless the family member pays rent (in which case, they’d likely be a tenant (or ‘contact holder’ in Wales) as opposed to a lodger).

Can tenants and contract holders take in lodgers?

In many cases, tenants and contract holders will need their landlord's permission before they can take in a lodger. Your tenancy agreement (or occupation contract in Wales) may contain a term on this, so you should check it first. It may allow you to have a lodger, allow it on certain conditions, or forbid it completely.

If you do need permission, it's best to get this in writing.

Evicting lodgers

If you have problems with a lodger (eg they are not paying their rent or are displaying antisocial behaviour), you may want to evict them. 

Most lodgers have fewer rights than normal tenants or contract holders and eviction is usually quicker and easier. If somebody’s lodger agreement sets out certain procedures to be followed for eviction, you should follow these. If it does not, you can usually evict a lodger by giving reasonable notice (in England or Wales) or 4 weeks’ notice (in Scotland).

Notice is not required if the landlord and lodger both agree to end the lodging arrangement. This process is relatively straightforward and the landlord doesn't need to serve any eviction notices or forms. If both parties agree, you can simply record this in a document stating that the lodger has agreed to leave.

For more information, read How to evict a lodger (for England and Wales) and Evicting lodgers in Scotland.


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