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Bring back the lodgers: How the UK housing stock could be used to combat the rental crisis

This research report argues that by giving homeowners more incentives to rent out room to lodgers, hundreds of thousands of spare rooms could be made available for rent.

Key findings: 

  • 160,000 rooms would be made available from a 1% increase in the number of under-occupying homes taking in a lodger
  • Taking in a lodger would provide a valuable source of  new income for older generations
  • Lodgers generally pay less than tenants as they have fewer rights
  • The Rent a Room Scheme is a win-win for all generations as the triple whammy of the cost-of-living, energy and inflation crises, bite
  • By uprating rent-a-room relief by inflation to £10,000 a year, more under-occupying households would be incentivised to share their homes
  • If the government doubled the relief for households who let out more than one room, even more housing supply could be made available during a time of national shortage and help to lower rents more widely
  • In 2020–2021 average under-30s households spent 31% of total expenditure on housing. This was before the recent spike in rental prices and 77% more than the average share of expenditure on housing for all households.
  • Around 19% of owner-occupiers in England had no savings in 2021 according to the English Housing Survey and taking in a lodger could help with bills.
  • More than half of owners under-occupy their homes and more than two-thirds of UK houses are under-occupied. Space inequality has also increased, with owner-occupied homes enjoying a third more space (108m2) on average than privately rented homes (76m2) and almost double the space as a social home. Just 7% of 55–65 year-olds report a lack of outside space compared to 21% of 25–34 year-olds.