– One in seven pensioners considering renting out rooms to make ends meet.
– Over half don't understand the responsibilities required of a landlord or the type of insurance cover needed.
– 20% of over 65s in London feel they have no choice but to let a room in their home.
With nearly half (47%) of retirees struggling to live off their pension, the UK housing market is expected to see a tidal wave of reluctant retired landlords – or 'Granlords' – emerging as over 65s desperately look for alternative ways to boost their retirement incomes.
According to research by MORE TH>N Home Insurance, 15% of retired homeowners – the equivalent of 1.6 million properties – are seriously considering renting out a room in their home to a stranger in order to boost their retirement income, resulting in a new crop of inexperienced and unlikely landlords.
On average, those over 65s polled receive a weekly retirement income of £224. When just over £190 of living costs are deducted per week, pensioners are left with just £33 to spend as they like. It's perhaps no surprise, therefore, that so many are considering using their home as a source of additional income.
The research also reveals just how unprepared reluctant 'Granlords' are for the challenges and responsibilities they face. Of all UK retired homeowners researched, over half (51%) do not feel they have sufficient knowledge about the responsibilities required of a landlord or the type of insurance cover they need.
The 'Granlord' trend is most acute in London, where 20% of retired homeowners say they feel they have no choice but to let a room in their property.
Commenting on the findings, Matthew Poll of MORE TH>N, said:
"After years of working, being forced to become a landlord after retiring is far from an ideal situation but it's clear that many people are considering this to provide additional financial support. For those looking to bring in a lodger, it's important that they make sure they choose the right person but it's also vital that they have the right cover and I'd urge anyone considering this to contact their insurer."
To help homeowners who find themselves in the position of letting out a room in their home for the first time, MORE TH>N Home Insurance has put together a checklist of things to think about:
Cover: home insurance companies have different policies regarding lodgers. If you're considering letting a room, contact your insurer to inform them of your circumstances and discuss whether or not you have the right cover in place.
Interview: thoroughly screen any prospective lodgers to make sure you find the right person for you and your home. This could involve preparing a standard set of 'interview' questions that includes their reasons for wanting a room, their current state of employment and how long they intend to rent for. At the first meeting you should always have a Lodger Application Form to hand to collect all the necessary details about a lodger, such as their employment details, next of kin, bank details and NI number, allowing you to screen them effectively and run relevant background checks.
Checks: for very little cost you should run professional various checks on each of your lodgers, including credit and reference with a recommended rent checker service, so that you know they are of sound character and will be able to pay the rent.
References: make sure you get references, preferably from a previous landlord.
Contract: ensure your lodger signs a formal contract or Lodger Agreement when they move in detailing the agreement set and inventory to avoid any problems further down the line. MORE TH>N customers can download a lodger agreement if they have Legal Services as part of their home insurance policy4.
Rights: after you have found an appropriate lodger you should take the time to familiarise yourself with their rights regarding the property from a reputable company or website.
Make the house rules clear: create a 'starter pack' for a prospective lodger that lets them know where they can and can't go in the house, expected behaviours and responsibilities, appliance information, emergency information and contact numbers and local information.