With millions of unoccupied homes in the UK, Aaron Strutt, product and communications director at Trinity Financial, says it is “astonishing that successive governments have allowed the rent-a-room scheme to remain unchanged for so long.”
The UK government announced a tax-free limit of £7,500 for renting a spare room in July 2015, during former Chancellor George Osborne’s summer budget. It was later launched on April 6, 2016.
Following various changes to the UK property market over the past 11 years, Strut says the tax relief limits and room rental system need to be updated.
According to SpareRoom’s rental figures, the average UK rent for a room in a shared house was around £600 a month in 2015.
The latest figures from the third quarter of this year show that the average UK rent has risen to £769 per calendar month.
“The tax-free threshold for renting a room has not been increased since 2016, despite a significant rise in rents and increasing pressure on the housing market,” says Strutt.
“With an estimated 28 million spare bedrooms across England, Scotland and Wales, it seems crazy that so many remain unused while people struggle to find somewhere affordable to live.”
“A sensible, modern policy that offers financial incentives along with appropriate safeguards for both homeowners and renters can make a real difference,” Strout explains.
“Increasing the tax-exempt limit could encourage more homeowners to take on renters, helping them with the rising costs of living while providing much-needed, affordable accommodation.”
“Even making use of a small proportion of these spare rooms can relieve pressure on local councils and the wider rental market.”
“Surely it makes more sense to make better use of the housing we already have, rather than leave millions of rooms empty while the housing crisis continues?”
Data published today by SpareRoom It revealed that the number of rooms for tenants in properties where owners live decreased by 1.4% in the third quarter compared to the same period last year, but this type of room rental still represents 29% of the apartment sharing market.
The flat-sharing website estimates there are around 28 million empty bedrooms across England, Wales and Scotland.
If 5% was provided to renters, it could provide housing for 1.4 million people, she says.
SpareRoom has called on the Chancellor to use this month’s budget to increase the threshold for tax relief under the room rental scheme in a bid to encourage more homeowners to take on tenants.
