How Much Could You Make from Renting Out Your Spare Room?

It’s not just professional landlords that can make money from letting out properties; if you have a spare room in your home, you could make more than you expect from renting it out.

How Much Could You Make from Renting Out Your Spare Room?

How Much Could You Make from Renting Out Your Spare Room?

Although London is well known as being the most expensive region to rent in the UK, room rents are actually increasing much quicker in other parts of the country, according to research by SpareRoom.co.uk.

Excluding the capital, the average UK room rent has risen by 5.01% in the past year, compared to 1.63% in London.

The regions recording the greatest increases in room rents are the South East and South West. In the South East, the average room rent has risen by 6.59% in the last 12 months to reach £485 a month. In the South West, prices are up by 6.62% to an average of £431.

If you have a spare room in Northern Ireland, you could make around £280 per month. Although this is low compared to the rest of the UK, room rents in Northern Ireland have increased quickly over the past year, by 5.26%.

In London, homeowners thinking of renting out a room could take in £747 per month. However, room rents have increased at a modest rate over the last year, by just 1.63%.

Just one region has recorded a slower pace of growth over the same period – a 1.52% increase in the West Midlands, where the average room rent is now £400 per month.

Average regional room rents

RegionAverage room rent 2016Average room rent 2015Increase
London£747£7351.63%
East Midlands/East Anglia£392£3764.26%
North East£362£3493.72%
North West£379£3663.55%
Northern Ireland£280£2665.26%
Scotland£420£4063.45%
South East£485£4556.59%
South West£431£4056.42%
Wales£354£3384.73%
West Midlands£400£3941.52%
UK (excluding London)£440£4195.01%

Outside of London’s central boroughs, Twickenham is the area where would-be landlords can earn the most from renting out a spare room, with monthly room rents of £647, amounting to over £7,500 per year.

The second most expensive town for renting a room is Esher, in Surrey, where landlords can make £629 a month.

If you are considering renting out your spare room, you will be pleased to learn that as of 6th April, homeowners can now earn up to £7,500 per year tax-free.

The best places to rent out a room are as follows:

PositionTownAverage room rent
1Twickenham£647
2Esher£629
3Barnet£625
4Kingston upon Thames£621
5Epsom£581
6Guildford£578
7Staines£578
8Woking£578
9Reigate£561
10Croydon£559

However, if you live in the following areas, you may not make as much as you want to:

PositionTownAverage room rent
1Belfast£278
2Rochdale£279
3Paisley£287
4Londonderry/Derry£291
5Batley£297
6Bradford£307
7Bootle£315
8Dundee£317
9Sunderland£320
10Smethwick£320

SpareRoom.co.uk’s Matt Hutchinson comments: “The first quarter of 2016 saw some respite for renters, thanks to an upturn in supply as buy-to-let investors rushed to complete ahead of the Stamp Duty increase.

“But this may only provide temporary relief – the UK’s residential rental market is still groaning under the weight of demand, particularly in London’s satellite towns.

“Even cities like Manchester and Birmingham, which offer some of the highest levels of supply for renters in the UK, are massively oversubscribed with six tenants competing for every room.”

He adds: “With UK rents rising 5% in a year, it’s hardly surprising 65% of SpareRoom users said they were in favour of rent controls. It’s come to something when lower than average rent increases are seen as good news.”1

1 http://www.dailymail.co.uk/money/mortgageshome/article-3606230/Find-rent-spare-room-make-s-not-London-seeing-fastest-rises.html

©2017 Just Landlords

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