Earn £4,250 a year tax free from your ‘forgotten room’

A Midlands homes expert has suggested a novel way for householders to rent out their “forgotten room” and earn up to £4,250 a year tax free.

Ron Fox, whose company Noreus is based in Stafford, said: “For many people the loft is a forgotten room, but letting out space in your attic is becoming a growing market.”

Students wanting to store luggage in the holidays, families moving long distance or couples getting divorced are all people wanting to keep items safe in the short term.

“Another idea would be to move your student’s belongings into the attic and rent out their room to a lodger while they are away at university,” he added. “Or you let the room short term or nightly to tourists.”

According to a new survey by the Santander Bank one in ten homeowners earns extra cash by letting a room to a lodger bringing in £3.9 billion a year – an average of £182 a month.

But Ron warned residents that they first needed to do some preparation work.

• Speak to your mortgage lender before renting a room as some impose restrictions while some landlords may not let you sub-let a rented property.
• Talk to your insurance company as there are implications for your home cover.
• Contact your local council if you are a single person and you take in a lodger as you would lose the present 25 per cent council tax discount.  
• Tell the Inland Revenue as all the income must be declared on a self-assessment tax form each year. Although you will have to pay tax or any income above the £4,250 tax free limit you can claim back relief for wear and tear and maintenance.
• Finally, ensure that there is no condensation in the attic, as it could damage any stored items, particularly electrical items.

The best solution is to spray foam your loft with a system such as the Icynene Insulation System which is an environmentally friendly investment for your home and comes with a lifetime warranty. It also reduces sound levels in the whole home.

This 100 per cent, water blown, soft spray insulation system doesn’t shrink and forms an air-tight seal in the attic.

Another bonus is that it is non toxic and there are no irritable materials being blown about in the loft which could get into the stored items.

But the biggest advantage is that it reduces heating bills by up to 50 per cent as it literally stops heat going up through the roof.

With an average UK heating bill of £1,200 householders can save up to £600 a year, every year.

Although it costs up to £3,000 to have the average 60 square metres of attic space spray foamed the good news is that the Government charges VAT at only 5 per cent compared to the normal 20 per cent.

With the revenue from renting out the space and the saving in heating bills this amount can be recouped within a year.

Websites to help residents include www.spareroom.com, www.crashpadder.com and www.storemates.co.uk.

For more details ring Ron Fox on 01782 756995 or 01782 756995.