The number of UK over-50s taking in lodgers and becoming live-in landlords has risen by 41% in a two-year period, according to new data from SpareRoom.co.uk.
The number of adults aged 55-64 years taking in lodgers almost doubled (up 93%) during the same period – more than any other age group. Meanwhile, 46% more Brits aged 65+ took in lodgers in 2013 than in 2011.
SpareRoom calculates that during their retirement years, over 65s could earn £128,639 by renting out just one spare bedroom and in London a staggering £176,3412. That means those with two spare bedrooms to let could generate more than a quarter of a million pounds – £257,278 – in retirement, or £352,682 in London.
Moreover, almost £100,000 (£97,750) of these earnings are completely tax-free, due to the government’s Rent A Room scheme threshold, which allows Britons to earn up to £4,250 per year from letting furnished rooms in their homes, without paying any tax.
Matt Hutchinson, director of SpareRoom.co.uk, said: “Retiring from your career doesn’t mean you have to stop making money. Monetising existing assets – such as renting out an otherwise under-used room – has no long-term liability for the estate, unlike equity release. Plus, it brings in more than four times the income of the average paltry UK pension pot. So there’s no reason why retirees shouldn’t find their entrepreneurial streak after bowing out of the workforce.
“There’s far less stigma around taking in lodgers amongst the older generation, many of whom grew up in the post-war years when lodging was widespread. Many retirees find they get as much satisfaction out of the companionship of taking in lodgers as they do from the income.
“But if the government wants to improve the outlook for pensioners, it needs to drive awareness and further incentivise Brits to become live-in landlords by raising the Rent A Room Scheme threshold, which hasn’t changed since 1997. This will also free up supply, and ease the now colossal demand on the rental sector as house prices rise to unaffordable levels. Our ‘Raise The Roof’ campaign calls on the government to raise the threshold to £7,500 per year to reflect UK rents.”