The supply of lodger rooms in the UK has seen a decline, with data from SpareRoom indicating a 1.7% fall in the year to Q2. This follows two years of flat supply in the market.
An organisation is advocating for the Autumn Budget to increase the Rent a Room Scheme's tax-free threshold to £11,000. Currently, homeowners and landlords can earn up to £7,500 annually tax-free from letting out furnished accommodation in their main home under the scheme.
Flatshare supply overall has also declined by 3.2% in the year to Q2. SpareRoom highlights that lodgers offer a more affordable option, with the average UK room rent for lodgers standing at £729 per month, which is £385 less annually than the average UK room rent of £761 per month.
Matt Hutchinson, director of SpareRoom, stated that falling supply has led to record high room rents in most regions. He suggested that raising the Rent a Room Scheme threshold could help ease pressure on the housing crisis and boost household finances.
There are an estimated 28 million empty bedrooms across England, Wales, and Scotland. Freeing up just 5% of these rooms could provide accommodation for 1.4 million people, according to SpareRoom.