The number of households taking in a lodger has risen by 89% in just three years.* With more tenants turning to this option to help cover rising living costs, it’s important for landlords to understand the implications. Here are the key points to consider if your tenant already has a lodger, or asks for permission to take one.
What is a lodger?
A lodger is someone who lives with a homeowner or tenant in their main home as a paying guest. They share facilities such as the kitchen and bathroom and may receive additional services like meals or laundry. While they are not part of the household or family, they are also not tenants in the legal sense.
Can my tenant have a lodger?
Most tenancy agreements specify that tenants can only have a lodger with their landlord’s written consent. As the landlord, you’re entitled to refuse permission if you wish, and you don’t have to provide a reason.
Should I allow my tenant to take a lodger?
It’s entirely your decision, but there can be advantages. In today’s climate of rising living costs, allowing a lodger can help your tenant manage bills and rent more comfortably, reducing the likelihood of rent arrears. It could also make your property more appealing to tenants who want the flexibility to share costs, potentially allowing you to command a higher rent.
Key considerations before agreeing
Before you give the go-ahead, think carefully about the following:
- Space and suitability: Is there enough space in the property for an additional person? Overcrowding can lead to wear and tear or even safety issues.
- HMO regulations: Will allowing a lodger turn your property into a House in Multiple Occupation (HMO)? An HMO is typically a property occupied by three or more people forming two or more households who share facilities. Many HMOs require a council licence, which can be costly and come with strict conditions. Always check with your local authority before proceeding.
- Mortgage and insurance implications: Allowing a tenant to take in a lodger can affect your buy-to-let mortgage or landlord insurance policy. You may need to inform your lender or insurer about any change to the property’s occupancy.
Setting clear agreements
If you decide to allow a lodger, ensure you have a written agreement in place with your tenant. This should clearly set out how many lodgers are permitted and under what conditions.
Your tenant should also draw up a written lodger agreement outlining:
- That the person is a lodger, not a tenant
- The rent amount and payment terms
- Notice requirements for ending the arrangement
Remember that lodgers do not have the same rights as tenants. They can usually be asked to leave with reasonable notice, and if your tenant moves out or is evicted, the lodger must leave too.
If you’re unsure about the legalities, seek professional advice before approving any arrangements.
Allowing a tenant to take a lodger can be beneficial for both parties when handled correctly. It can ease financial pressure on your tenant while maintaining steady rent payments for you. However, it’s crucial to ensure you comply with legal, mortgage and insurance requirements before agreeing.
If you’d like to find out more about how our letting and management services can make your landlord experience simpler and more secure, get in touch with our team today.
*Source: Spareroom
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