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No, it is not a “wind-up”; in a manner of speaking, lodgers do give away properties – real bricks and mortar properties. Are you going to be one of those that pick up a freebie – or are you going to look a gift horse in the mouth? 

The giveaway element stems from the simple fact that the rental income of a lodger can give you a deposit to fund a property purchase for your home or investment purposes.

Renting to a lodger makes great financial sense because the room chosen for renting is usually one that is not required for occupation and is just languishing there doing nothing of use.

Getting in a lodger makes use of the room and above all brings in an income which would not otherwise be available.

It is very much a windfall.

More than that, the government is keen on the idea of getting in a lodger so it doesn’t tax lodger’s rent up to £7,500 per year.

Helpfully, HMRC has made the relief available to tenants as well as owner occupiers. If you are a tenant, you should check that your tenancy agreement allows you to rent out a room. 

By leveraging your lodger’s income, you can secure a mortgage to buy a property to rent out. If the rent of your tenant is enough to pay your monthly mortgage instalments, bingo!

You have your free property from your lodger – thanks to the windfall income from a spare room.

1. The basics of renting to a lodger

It is good practice to provide your lodger with a written letting agreement prepared by a lawyer.

To get the £7,500 tax exemption, the room must be furnished.

There are of course issues of safety, security and peace of mind when sharing accommodation with someone else and it is therefore important to fully vet and be comfortable with any person you intend to take in as a lodger, especially if you have children or vulnerable persons in your home. 

Where two people let a room to a lodger, they share the £7,500 tax allowance, each receiving £3,750. More information about the tax aspects can be found in the helpsheet HS223 Rent-a-Room Scheme (2018) on the website www.gov.uk

Remember that bringing in a lodger may have implications for:

  • Your agreement with your mortgage lender (if any)
  • Council tax – single person’s discount
  • Home and contents insurance.

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2. Growing the deposit   

The deposit for your free property is going to be the rent from your lodger.

You are clearly going to get your free property faster if you ring fence the receipts and allow them to grow as fast as possible.

Identify the best interest bearing account so as to grow the sum as large as possible.

How long you will need to wait before you can leverage your deposit will depend on the amount you get each month. If you get say £500 per month, that’s £6,000 per year, £24,000 after 4 years.

There are many parts of the country where that is more than enough to fund the purchase of an affordable property on a 75% loan to value (LTV) basis, including stamp duty and purchase costs.

3. More free properties

The great thing about a free property from a lodger is that the well doesn’t run dry once you have your free property.

Keep on renting to lodgers to get more free properties indefinitely!


4. Protecting your freebies

Another brilliant thing with free properties from lodgers is that by continuing with lodgers you have the opportunity to build up a large reserve which you can use to protect your free property or properties in the future.

A reserve could be used to:

  • Deal with void periods when there is no tenant in occupation and no rent coming in
  • Cope with rises in interest rates leading to higher mortgage payments
  • Pay for repairs and maintenance
  • Pay for management of the property by an agent if required, giving you a hands-free investment.

No money property investing (investing in property without money)
No money down purchases (buy a property then clawback the cost)
Grab a free property! (ways you can own properties at zero cost)


It really is possible to get not just one but several free properties by taking in a lodger.

Yes, it will not happen overnight – as it will take time to save each deposit or down payment.

True, it may involve a certain amount of inconvenience or risk by bringing someone into your private space, especially if it is a complete stranger.

Yes, the whole thing will require careful planning and structuring and it will be prudent to take professional advice throughout.

But at the end of the day, are you going to ignore a fairly easy and painless way to get hold of not just one free property but several?

Do you have the opportunity to get in lodger?  If so, do you have any concerns or worries? Please leave your comments below.

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Dalton Barrett
Rebel Property Coach

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One comment

  1. Yes I did think you were winding us up but all that is written on this subject makes sense. This is the age of electronic devices therefore it is imperative to ask questions with references and a large deposit. No one wants to lose a deposit. There must also be boundaries and respect between the parties.
    Thank you RPC.

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