Proptech innovator Matt Hutchinson has welcomed the increase in room rental tax relief from £4,250 to £7,500 as part of the Chancellor’s Emergency Budget.
The SpareRoom.co.uk director said: “In the midst of a housing crisis, and with building levels behind all forecasted targets, it’s vital we make better use of existing stock and this will do just that. All too often housing initiatives benefit a select few – but this helps millions of renters and homeowners.
“There are an estimated 19 million empty bedrooms in owner-occupied properties in England alone. Freeing up just 5% of those rooms would accommodate almost 1m people – the equivalent of a city the size of Birmingham.
SpareRoom.co.uk has been campaigning to get threshold increased since 2009 and assisted Solihull MP Julian Knight with his submission for an increase which was given to the Chancellor earlier this month.
“Encouraging people to take in lodgers could help them avoid repossession when interest rates rise and their mortgage repayments are adjusted. Lodger landlords can earn, on average, £8,335 per year in London, and £6,071 across the rest of the UK,” he added.
“The Rent a Room Scheme threshold has remained unchanged at £4,250 for 18 years. Only a fifth of UK towns and cities have average room rents of below that mark, while all rooms in London are way outside of the threshold.”
The ‘spare room’ phenomenon has hit the headlines with the launch of sites like Airbnb, where users have appeared unaware of tax implications of leasing out spare space, or where buy-to-let properties have ended up being listed as short-term accommodation on sites like this.