We want to help people in financial difficulties stay in their homes.
Not being able to pay your rent or mortgage can lead to bigger problems if you don't do anything about it.
Select a heading below to be taken straight to the information
Avoid repossession
If you are worried or struggling to pay your mortgage or are in arrears because of your financial situation has changed, you should talk to your lender first. New rules introduced in 2008 mean that lenders should treat repossessions as a last resort and may be able to reduce your monthly repayments.
Mortgage rescue scheme
The mortgage rescue scheme is a last resort designed to help stop your home being repossessed, if this would mean that you became homeless and entitled to support from the council. It involves selling all or part of a property to a housing association. This would cut your monthly payments.
Contact our Housing department 01772 906412 or Direct Gov mortgage rescue scheme for more details.
Mortgage support
Support for Mortgage Interest may help you with your mortgage interest repayments to enable you stay in your home if you've been on certain benefits for 13 weeks or more.
Homeowners Mortgage Support could help if your household has had a temporary, unexpected drop in income. You could be eligible to delay some of the interest repayments for up to two years.
Visit Direct Gov homeowners mortgage support for more information.
Help with your rent
If you need financial help to pay all or part of your rent you may be entitled to Housing benefit and/or Council Tax benefit. If you rent from a private landlord there's a new way of working out housing benefit known as Local Housing Allowance.
Housing benefit is sometimes not enough for you to be able to pay your rent and your council tax benefit may still leave you struggling to pay your council tax.
There is a scheme that can help in difficult situations. It's called discretionary housing payments.
It's not part of the normal housing benefit or council tax benefit schemes. For more information see our page on Discretionary housing payment.
Buying a home
Getting on the housing market can be hard, for example, if you are finding it hard to save for a large enough deposit. There are a number of schemes available to help you buy and move on to a new home. To find out more about these schemes you can see the Direct Gov advice for first time buyers website or contact a local HomeBuy agent. The HomeBuy agent for the North West is Plumlife.
More information about the Homebuy scheme, including Homebuy agent details can be found on the Homes and Communities agency website.
Essential home repairs
If you are a homeowner or a private tenant you may be able to claim help towards making improvements or adaptions to your home that would help you keep your independence. Especially if you are over 60, disabled, or your home is a danger to your health and safety. To find out if you are eligible see our page on Home improvement grants.
If you receive certain benefits you may be eligible for a Warm Front Grant of up to £3500 worth of insulation and heating improvements. To find out more visit the Warm Front website or freephone 0800 3162805.
Save money and the planet
With some simple energy saving improvements you can save money and help fight climate change. An energy efficient home is cheaper to run and could be a key selling point if you choose to sell your house. See our information on cutting the cost of climate change in the home.
Letting rooms in your home
Letting rooms in your home can be a useful way to get extra income. However, if you are letting (or thinking of letting) part of your home it is important to understand your obligations.
Rights of landlord and tenant
In law, a resident landlord letting is one where the landlord and the tenant live in the same building. This includes conversions where they live in different parts of the same property (however long ago the property was converted) but excludes purpose built flats, with landlord and tenant living in different flats.
There are two main issues where the rights of landlord and tenant differ for resident landlord lets compared with other types of tenancy - rent and security of tenure.
Broadly, someone who lets from a resident landlord:
- does not have a right to challenge the level of rent that he or she has agreed to pay
- can be given less notice to leave if the landlord wants to end the letting
For more information on your rights to let a room in your house, see Directgov Letting rooms in your home.
The Rent a Room scheme
If you already have a lodger or are thinking about letting furnished rooms in your home, you can receive up to £4,250 a year tax-free (£2,125 if letting jointly). This is known as the Rent a Room scheme.
How the scheme works
The Rent a Room scheme is an optional scheme that lets you receive a certain amount of tax-free 'gross' income (receipts before expenses) from renting furnished accommodation in your only or main home.
Who can take advantage of the scheme?
You can choose to take advantage of the scheme if you let furnished accommodation in your only or family home to a lodger. (Your only or family home is the one where you/your family live for most of the time. A lodger is someone who pays to live in your home, sometimes with meals provided, and who often shares the family rooms.)
A lodger can occupy a single room or an entire floor of your home. However, the scheme does not apply if your home is converted into separate flats that you rent out. In this case you will need to declare your rental income to HM Revenue & Customs (HMRC) and pay tax in the normal way. Nor does the scheme apply if you let unfurnished accommodation in your home.
Do you have to be a home owner?
No. You can choose to take advantage of the Rent a Room scheme, regardless of whether you are a home owner or are renting your home. However, if you are renting, you should check whether your lease allows you to take in a lodger.
If you're a mortgage payer it's best to check whether taking in a lodger is within your mortgage lender's and insurer's terms and conditions.
If you share a home and both let a room or rooms
If you are both letting furnished accommodation in your joint home, you will each be entitled to receive half of the allowance (up to £2,125 for the 2009-2010 tax year) without paying tax.
If you provide meals and laundry services
If you charge for additional services, you will need to add the payments you receive to the rent, to work out the total receipts. If you get more than £4,250 a year in total, you will have to pay tax, even if the rent is less than that.
The advantages and disadvantages of the scheme
There are advantages and disadvantages of the scheme - it's simply a matter of working out what is best for you.
The principal point to bear in mind is that if you are in the Rent a Room scheme you can't claim any expenses relating to the letting (for example, wear and tear, insurance, repairs, heating and lighting).
To work out whether you will be better off joining the scheme or declaring all of your letting income and claiming expenses on your tax return you need to compare the following:
- how much income you are left with after your expenses
- the amount of your receipts (rent plus any income from laundry services, meals, etc) over £4,250 or £2,125 if letting jointly (2009-2010 tax year)
If you opt out of the scheme (or simply do nothing) you will pay income tax on the first amount. If you opt into the scheme you will pay tax on the second amount.
Rent a Room scheme and running a business
If you run a bed and breakfast business or a guest house, or provide catering and cleaning services as part of a letting business, the Rent a Room scheme can still apply to you. You will need to complete the relevant parts of the self-employment pages of your Self Assessment tax return.
How to opt in or out of the scheme
If you want to opt in
- if you don't normally receive a tax return and your receipts are below the tax-free thresholds for the scheme, the tax exemption is automatic so you don't need to do anything
- if you wish to opt in and your receipts are above the tax-free threshold, you must tell your Tax Office - you can do this by completing a tax return and claiming the allowance
If you want to opt out
- just complete a tax return within the usual deadline and declare the relevant lettings income and expenses on the property pages
For more information on renting a room and lodging see DirectGov Rent and Room scheme.
Date Updated: 17/12/09