Rental supply from lodger landlords who rent out rooms in their own homes make up a quarter of all supply in the flatshare market – but this is now in decline.
Data from flat share service SpareRoom shows that in January this year, lodger room ads fell 2.5% on the previous year, the first decrease since the pandemic halted the rental market.
Around half of lodger landlords – 43% of whom are retirees – rent out rooms to help meet day-to-day costs such as food shopping, bills, or running their cars.
Room offered ads posted by those renting out rooms in their own homes, represent just over a quarter (26%) of all ads on the platform. The growth rate slowed considerably between January 2024 and 2025 and is now in decline:
| Time period | YOY change in number of rooms advertised to lodgers |
| Jan 2022 | 10.68% |
| Jan 2023 | 14.62% |
| Jan 2024 | 19.33% |
| Jan 2025 | 1.46% |
| Jan 2026 | -2.51% |
The peak in January 2017 came after the amount of tax-free income lodger landlords could earn was increased to £7,500 per year in 2016.
Back then, the UK’s average monthly room rent was £573, keeping earnings well within the threshold limit which equates to £625 per month.
Over the past five years, however, the UK average room rent has risen 29% from £580 per month in Q4 2020 to £749 per month in Q4 2025.
To return supply to levels seen when the Rent a Room scheme was last updated, SpareRoom is calling on the government to raise the tax-free threshold to reflect rents today.
It also wants to see the loophole that allows holiday lets to use the scheme closed.
There are currently 2.41 renters searching per room available to rent in the UK, with demand dramatically higher in the most popular areas.
However, there are also an estimated 28m empty bedrooms in England, Wales and Scotland.
While not everyone is in a position to rent these out, freeing up just 5% of those rooms would provide affordable accommodation for 1.4m people, according to the platform.
SpareRoom director Matt Hutchinson comments: “In the middle of a housing crisis we should be doing everything possible to protect supply in the rental market, whether it comes from landlords or homeowners.
“Lodger landlords and the rooms they offer make up a sizeable wedge of the flatshare market and although renting as a lodger doesn’t suit everyone, the flexibility and often cheaper rents are a draw.
“The last time the Rent a Room scheme was altered, supply rose and remained at healthy levels until the pandemic.
“A booster shot in the arm is what’s needed now.
“We know the administrative burden of having to fill out a tax return does deter people from renting out rooms, so the tax-free threshold needs to reflect rents today.
“We also want to stop those running holiday lets from using the scheme, so we can divert supply into the rental market.
“We shouldn’t be incentivising short-term holiday stays when there’s such a large supply-demand imbalance in the rental market. We need housing, not hotel rooms.”
This article is taken from Landlord Today