Middle class couples taking in lodgers to help debt problems

Middle class homeowners are said to be beating the recession and helping pay off their debt by taking in a lodger.

According to spareroom.co.uk, as many as 210,000 people are now renting out rooms to help with their mortgage payments.

Matt Hutchinson, director of the site, said homeowners are feeling the financial pinch, adding: “Numbers have been on an upward trend as thousands of homeowners, who may have thought they had escaped the recession unscathed, received a wake-up call about the fragile state of their finances.

“We expect another spike in live-in landlord numbers after the coalition Government’s spending review in October.”

An additional report from home insurer LV= revealed that the number of homeowners with lodgers has risen by 15% over the last three years.

There have been 30,000 more “young homeowner couples” becoming live-in landlords than a decade ago, and an increase of 20,000 with a high income over the same period, according to the research.

Despite this, financial strain and debt problems are the main reasons for taking in lodgers. More than a third (37 per cent) of owners say they are unable to pay their mortgage without extra help, while one in 15 (almost seven per cent) took in lodgers after being made redundant.

However, some financial figures have warned of the risks involved in becoming an amateur landlord.

Kevin Still, debt expert and director of Atlantic Financial Management, said: “There are potentially risks in becoming an amateur landlord, including reviewing the conditions of your mortgage, but it is an option to be considered if you are struggling financially.

“There are tax breaks available if the income declared. Many homeowners with surplus space accommodation and living space may want to consider letting a bedroom if they have debt problems. We take account of 3^rd party income when we set up a debt solution like a Debt Management Plan (DMP), though you have to look at the certainty of this as an income stream.”

Bridging loans may be a suitable solution to short term debpt problems.

Related posts:

1. A man’s recession: Men hit harder by debt problems than women
2. Divorce on the rise again as debt-ridden couples save up for split
3. Warning as £55bn SME debt spiral could affect recovery
4. Buy-to-Let properties: How Bridging loans can help you make a great investment
5. Financial advisers make up 7% of payday loan borrowers

This entry was posted on Tuesday, October 5th, 2010 at 1:32 pm and is filed under bridging loans . You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.