Renting out spare room can pay off half your mortgage

Published on Monday 27 October 2008 09:20

THE average rental income from a spare room in Edinburgh can pay off nearly half of a landlord's mortgage, according to new research.

A report by flatshare website SpareRoom.co.uk found that a landlord renting a room in the city can expect rental income to cover 47 per cent of monthly mortgage payments.

This is below the national average of rental income covering 66 per cent of monthly mortgage payments, largely due to high house prices in the Capital.

Blackburn comes top for the UK. A landlord renting a room there can expect rental income to cover 96 per cent of his monthly mortgage payments.

In terms of rental income alone, a typical spare room in Edinburgh is worth 71,567 – below the 80,077 average for the UK. Matt Hutchinson, director of research said: "Landlords in Edinburgh charge slightly below the national average to rent out their spare rooms and, combined with higher house prices in the city, this means lodgers make a smaller contribution to mortgage payments than in some other parts of the UK.

"Nevertheless, with finances especially tight in the current climate, lodgers provide a major financial lifeline to mortgage borrowers in Edinburgh."