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Boom in middle-class households taking in lodgers

Press release: 24/09/2010

  • 210,000 homeowners in the UK now have lodgers, reaching levels last seen in the 1960s

  • Typical lodger landlords are now middle class thirty-something couples

  • 37% of lodger-lords say they rent out their spare rooms as they need the money to make their mortgage payments

  • Average lodger households make £4,700 a year from renting out rooms

Financial struggles have led to a surge in middle-class families taking in lodgers, as homeowners struggle to pay their mortgage.

The Live-in Landlords report from home insurer LV= charts the changing demographics in lodger households over the last fifty years, revealing that the number of homeowners with lodgers has increased by 15% in the past three years, to similar levels last seen in the 1960s.

The traditional profile of a lodger-lord has also changed significantly. According to the report over there are now 30,000 more young homeowner couples who are lodger-lords than a decade ago and an increase of 20,000 'high-income' lodger-lords over the same period. In fact lodger-lords with higher than average income levels are now twice as common as they were in the nineties.

However despite this, financial problems are the primary motivator for taking in lodgers. More than a third (37%) of lodger-lords say they're unable to pay the mortgage without extra help, while one in fifteen (7%) say they took in lodgers as a direct result of being made redundant.

The report reveals that the demographics of live-in landlords have changed dramatically over the past three decades. In the 1960s a lodger-lord was twice as likely to be a woman than a man. She was also most likely to be in her fifties, not working and living on a low income and renting rooms to men in their early twenties.

By contrast, the modern lodger-lord is now likely to be a younger, married couple between the ages of 25-40, of a middle-to-high income, taking in a single lodger of a similar age to them.

This is partly reflecting the rise of the 'friend-lord’ – landlords who take in friends and charge rent. Two-thirds of lodger-lords now live with friends or acquaintances, compared to the 1960s when the majority of lodger-lords housed strangers.

Yet while the number of lodger households is booming, the findings show that many homeowners are unaware of the actions they should take as a lodger-lord. 42% do not know that they need to inform their insurer of their change in situation to ensure cover remains valid, while only half (50%) realise that they can benefit from tax breaks if they take in a lodger.

The Government rent-a-room scheme enables homeowners to earn a tax-free income of up to £4,250 a year. This equates to a monthly rent of just over £350. A higher rate taxpayer would have to earn more than £7,000 to net the same amount. The rules apply to the renting out of a single room, or a whole floor of a property, as long it's furnished, but not a separate flat (on which tax would need to be paid in the normal way).

However taking in lodgers doesn't always come without problems. According to current lodger-lords, one in five lodgers (19%) have damaged property, and one in seven (15%) have had problems getting the rent, with the average cost of a problem lodger reaching £307.

LV= is today releasing advice for lodger-lords and encouraging homeowners to inform their insurer to ensure they are protected in the event of any damage.

John O'Roarke, LV= home insurance managing director, said: "This report shows there's been a significant surge in homeowners taking in lodgers to make ends meet – or even just to make the best use of spare space in the home. Renting out a room is a good way of boosting household income and is also a good way for young people to get some extra income when they face the expense of joining the property ladder. However homeowners do need to be aware of their rights and responsibilities as a lodger-lord. Accidents happen and problem lodgers can be a real headache, so families should always inform their insurer before they let someone move in to their property, even if they are friends."


All research was authored by Nelson Research ltd.Interviews were conducted online using the PanelBase UK online panel, from which a bespoke sample of 1000 UK adults aged 18+ were recruited, who had been either a landlord or lodger at some time since 1960, and 500 UK adults aged 18+ who were currently living in a household with a lodger.

Nationally representative quotas by age group and household tenure were applied to the sample answering recruitment questions. Estimates for current and historic prevalence of lodgers are derived from the recruitment phase of the survey.

The Live-in landlords report is available on request.

LV= is a registered trade mark of Liverpool Victoria Friendly Society Limited (LVFS) and a trading style of the Liverpool Victoria group of companies.

LV= employs over 4,000 people, serves more than 3.8 million customers and members, and manages around £9.5 billion on their behalf.

Liverpool Victoria Insurance Company Limited, registered in England and Wales number 3232514, is authorised and regulated by the Financial Services Authority, register number 202965. Registered address is: County Gates, Bournemouth BH1 2NF. Tel: 01202 292333.