If You’re Suffering From The First-Time Buyer Jitters...

...just remember that you can make your house pay its way, says property journalist Sharon Dale.

The latest research by Halifax reveals that first-time buyers are £651 a year better off than those who rent. The average mortgage payment on a three-bedroom house is £705 a month compared with a typical £759 per month cost of renting.

The gap is narrowing as house prices rise but if you look at a property as a long-term investment, then buying is a no-brainer. Rent is dead money, whereas you can chip away at a mortgage with monthly payments. There should also be some tax-free capital growth on your home if you keep it long enough.

This should soothe those who are afraid of making what is probably the biggest financial commitment of their lives.  However, it may not banish all the fears. Borrowing the best part of £100,000, or possibly more, still sounds scary.
Among the biggest concerns are not having enough money for holidays/entertainment, the cost of property maintenance and the worst-case scenario, being out of work.

So here are some ways you can make your home pay:

Rent-a-room scheme or what used to be known as taking in a lodger.

The trend for taking in a lodger is growing by almost 23 per cent a year, according to the website spareroom.co.uk, which is a very good way of finding a sharer. You can also advertise on easyroommate.co.uk.

One of the reasons why it is so popular is that the rental income is usually totally tax free. At the moment, the threshold is £4,250 a year but from April 2017, this tax-free allowance will increase to £7,500.

Remember that if you live alone, having a lodger will affect your council tax as you won’t be able to claim single-person discount unless your sharer pays council tax elsewhere. You must also inform your insurance company about your paying guest or it could affect claims.

If having a full-time lodger fills you with dread then don’t panic. You can always share part-time.

If you live in a university town or city, you could consider letting to a student during term-time only. Contact university student accommodation services for advice on how you can be added to their database.

There may also be the chance to let to someone who works Monday to Friday in your area and goes home at the weekend. This is more common than you think, especially in cities, and means that they may only want a room Tuesday, Wednesday and Thursday.

Airbnb is another money spinner, especially if you live in a tourist hotspot or a busy town or city.

For tax purposes this also comes under the rent-a-room scheme.  The great benefit of this is that you can let the room when it is convenient for you. Setting up as an Airbnb host is quite easy. Listing is free and the site takes a 3% service fee on each reservation. You are paid via Airbnb 24 hours after your guest checks in, either via PayPal or direct transfer.

The success of your venture will depend on feedback so think like a top hotel. Make sure your home is spotless and that the guest room has fresh, high thread count linen and fluffy towels. Some people go the extra mile and include snacks, water, tea and coffee-making facilities and tourist leaflets.

Renting out your drive is an option if you live in a city or town centre where parking costs a fortune  or your home is close to an airport, music venue or popular football ground.

You can advertise on justpark.com, which is free to list but adds a 25% service charge to the rental price, which is paid by the driver. This company also administers the bookings and collects payment. Or you can list on parkonmydrive.com, which charges a £15 annual fee.  

Publish date: 15/09/2017