Make your home WORK: How to cash in from your property

Make your home WORK: From holiday swaps to lodgers and parking space rentals, there are plenty of ways to cash in from your property

• Soaring bills and mortgage payments mean many are looking for extra income
• Homeowners can make money from short lets, lodgers and even driveway rental
• We look at different income streams and the rules they need to be aware of

No one needs reminding that running a house costs more than ever these days. 

In addition to soaring energy bills and general inflation, mortgage payments are shooting up: this week interest rates were raised from 3.5 per cent to four per cent.

The Bank of England said 200,000 households had fallen behind on home loans by last summer, with up to 750,000 at risk of defaulting by the end of 2024.

The Bank bases its forecast on a predicted 10 per cent fall in household incomes as wages rise more slowly than food and fuel. To rub salt into the wound, business consultancy Hargreaves Lansdown warns of a ten per cent drop in house values, too.

Little wonder many owners want to make their biggest asset — their home — work harder. Here are four ways to make it sweat more, while your bills go down.

Make it pay: The Bank of England said 200,000 households had fallen behind on home loans by last summer, with up to 750,000 at risk of defaulting by the end of 2024

Take in a lodger

It sounds old-fashioned but the idea is back with a vengeance. HM Revenue & Customs allows live-in home owners letting out a furnished room to earn up to £7,500 a year from lodgers tax-free.

If you make less, your tax exemption is automatic. If you make more, you opt into the scheme by letting HM Revenue & Customs know on your tax return — and then you still claim the £7,500 tax-free allowance.

‘You may need permission from your mortgage lender before you rent out part of your property. It’s rare that a lender will have an issue with having a lodger, but still worth checking,’ says Kellie Steed, mortgage expert at website Money.co.uk.

You should do the same with your insurer: unless you have particularly valuable contents, there should be little problem.

Then you can advertise on social media or use an online lodger-finder like SpareRoom, Roombuddies or MondaytoFriday to get the right person, and for help with drawing up a written agreement specifying rent to be paid, contract length and break clauses.

lf your lodger is from overseas it’s also key to check their legal right to rent — details on gov.uk — and as with a long-term tenancy, it’s important to have gas and electrical appliances checked by a qualified tradesman annually.

Rent out your driveway

It’s wacky but true; hundreds of thousands let out driveways or parking spaces, especially near city centres or big transport, employment or sporting locations.

There’s a host of websites to list on, such as JustPark, ParkLet, Your Parking Space and Park On My Drive. 

They work like lettings agencies: most charge a fee per customer after you sign a fixed-term contract for listing your driveway online.

As with taking in a lodger, let your mortgage lender and insurer know — there is rarely a hiccup — and then create a contract through your listing website.

Your extra income is taxable but there’s no worry over planning consent in England. The government has explicitly said this use of a private driveway is permissible so long as it does not impede others or cause nuisance.

Holiday cottage: Renting out your home as a short-term let when you go away can be lucrative 

Air BnB-style letting

Whether it’s a spare room year-round or your whole house when you go away, remember that short-term lets, from a single night to a month, are now big business.

Some 8.4 million people used Airbnb to stay somewhere in the UK in the year to July 2018, the latest figures available because of the pandemic. 

Short-term lets have boomed since then, across platforms like vrbo and Nestify as well as Airbnb, so that figure will be much higher today.

‘The typical UK host on Airbnb makes just over £6,000 a year from renting out their property. 

This is extra income needed now more than ever,’ says Theo Thomas of Airbnb Northern Europe, which includes the UK.

And a survey of 2,000 Britons by specialist mortgage lender Together found that 24 per cent are considering allowing holiday lets in their home or in another property. Nearly half say they would do this to earn extra money.

For now there is little regulation and outside of London it’s not necessary to get planning consent to let out a room or house, although the government is reviewing the rules.

Home exchange

You could easily save thousands on your holiday if you’re prepared to do a home exchange: there are agencies which list flats and houses in up to 200 different countries, with the deal being a genuine swap rather than paying any rent.

Your home does not have to be large nor in a tourist honeypot, although exchange companies — leading ones include Intervac, HomeLink and Home Base Holidays — admit the most desirable addresses for swaps tend to be family homes in London, Edinburgh, the Cotswolds or historic cities such as York, Oxford and Cambridge.

Houseproud owners may be worried about breakages or carpet stains but tweaks to your insurance policy should cover any problems.

Many swappers also exchange cars (again, check the insurance) and the company through which you advertise will arrange a model contract and do due diligence on both parties.

Once again, check with your mortgage company for peace of mind and be prepared to pay a modest fee of £100 or so to register with an exchange firm which will then list your home with multiple photographs and videos.

Testimony to the success of this arrangement is that repeat business accounts for the lion’s share of bookings according to most firms.

On the market… moneymakers 

Wiltshire: Salisbury is a popular location for holiday swaps and a five-bedroom detached house like this will be popular. There’s an open fireplace and wood burner. Jackson Stops, 01747 850 858. £995,000

Gloucestershire: Ideal for Airbnb, this Cotswolds Grade II-listed five-bedroom house in Nailsworth has a self-contained flat. Both have original fireplaces and timbers. Murrays Estate Agents, 01453 886 334. £800,000

Buckinghamshire: There are three bedrooms in this barn conversion in Henley-on-Thames. It has spectacular views over a church and could be good for short holidays. Hamptons, 01491 572215. £795,000

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