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What to consider when you get a lodger

Check your home insurance before you rent out a room

A woman opening a door to invite someone in

If you're thinking about taking in a lodger, now is the time to do it. Rising rents and house prices mean there's a steady stream of willing lodgers, but before you advertise your spare room, check your home insurance.

Why take in a lodger?

Taking in a lodger is a great way to share the bills, generate a bit of income and have some company in the house.

It's thought that one third of households have two or more spare rooms. That's about 16 million rooms that could be making money for their owners.

In April last year, the government increased the tax-free amount you can receive in rent from a lodger through the Rent a Room Scheme. Happy days for those with a spare room.

What to consider before you rent out a room

Before you place that advert, you need to do a bit of homework. Here are our top five tips for getting your home ready for a lodger.

1. Check that you're allowed a lodger

If you have a mortgage, you must let your mortgage company know that someone is renting a room. Most lenders like to know who is living in the property.

If you're renting or you're a leaseholder, you'll need to check with the landlord that they are happy for you to take in a lodger.

2. Review your home insurance

Check whether your insurer will insure you if you take in a lodger. There may be a clause that says only family members can live permanently in the property. Find out more about how this could affect you below.

3. Make an agreement and put it in writing

It's best to set out up front what you expect from a lodger and what they can expect in return. That way, you both know where you stand if things go wrong.

Put down in writing:

  • How much deposit they need to pay in advance
  • What the rent will be and how you'd like it to be paid
  • How you plan to split the bills with them
  • Which rooms they can use as their own
  • Future rent reviews
  • How much notice you both need to give to end the agreement

4. Safety first

Having a lodger means that you're responsible for keeping your home safe and in good repair. You'll need to get an annual gas safety check on all appliances and flues and make sure all electrical appliances are safe.

You'll also need to take fire safety precautions such as smoke alarms on each landing and carbon monoxide alarms in rooms with open fires or wood burners.

5. References and criminal convictions

Your personal safety is paramount. Find out all you can about the person you plan to share your home with. Ask for references from their employer.

In particular, check for previous convictions. You may find that your home insurance isn't valid if your lodger has an existing criminal conviction.

How a lodger can affect your home insurance

When you take in a lodger some insurance companies may see you as being more of a risk. So they may increase the cost of your cover, exclude claims for theft or refuse to insure you altogether.

You should also check whether you're covered in case your lodger gets injured whilst living with you and decides to sue.

And, if a disaster strikes and you need to move out of your home because of a fire or flood, will your home insurance pay out for replacement accommodation for your lodger?

LV= provide a comprehensive home contents insurance policy that provides cover for theft, loss and damage even if you have a lodger.

However, your home contents cover doesn't cover your lodger's belongings. It's only for you and your family who live at the property. Your lodger will need to get his or her own contents cover.

LV= also offer legal expenses cover as an optional extra with home cover. This cover helps with the cost of legal expenses if you need to involve a solicitor in a disagreement with your lodger.

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