Rent a Room Scheme or Buy to Let?

[tallstevef]

Hi All,

I'm in a position where I'll be moving in with my girlfriend in a few months and have a 2 bed flat which will become vacant.

The flat is in a decent area, is furnished and would probably command between £1000-1200PM in rent - however, I'm aware that I'd have to change mortgage (to a buy to let), get a bunch of certificates in place, arrange a management company and have to consider taxation. Just a quick check on the mortgage change seemed to indicate this being quite expensive (about 2K)...

The Rent a Room scheme seems a lot less hassle - true, I wouldn't get anywhere near the market rate income but I wouldn't (I don't think!) need to change mortgage and there wouldn't be any taxation impact..

Questions are:

1. Given a market rate of say 1100pm, how much (ballpark) would be the monthly figure after management company deductions?

2. For the Rent a Room scheme - I'd imagine it would be advisable to get a legal agreement for length of stay etc. Is this something a "normal" solicitor would be able to draw up?

Just wondering what the learn'd masses here think...

[anonymous-user]

I'm pretty sure you have to live there to be eligible for the rent a room scheme, so if you are moving out it's not an option.

[Sarnie]

And you most definitely need to inform the lender if this is no longer your main residence and are now renting the property out, which is not what you or the lender signed up for.

[Eric Mc]

I can confirm that the Rent a Room scheme only applies if you live in the property.

[BoRED S2upid]

Rent a room is also limited to the amount you can earn tax free so you could still have to fill in your self assessment.