Rising mortgage costs are leading to a surge in homeowners taking in lodgers. Research from Mortgage Advice Bureau found that 52% of prospective buyers plan to take in a lodger to supplement their income.

As part of the rent a room scheme homeowners can earn up to £7,500 tax-free from letting out furnished accommodation in their home. Any amount above this tax free allowance is then taxed at your income tax rate.  

Most lenders allow a borrower to take in a lodger, providing they have sought permission first. Before taking a lodger, you should check your mortgage’s terms and conditions, especially around what is called consent to let.