SpareRoom has urged the Chancellor to raise the Rent a Room tax threshold in this week’s Budget, warning lodger supply fell 1.4 percent in the year to the third quarter of 2026.
Lodger rooms made up 29 percent of UK flatshare supply in the quarter, down year on year, with inner London down 2.9 percent to 17 percent of supply. The tax-free allowance has sat at £7,500 since 2016, while Ireland will lift its equivalent to 16,000 euros next year.
With the Autumn Budget days away, the pitch links empty bedrooms to fast supply. SpareRoom puts the prize at 1.4 million people housed if just 5 percent of England, Wales and Scotland’s 28 million spare rooms were let.
SpareRoom points to Ireland’s £7,500 freeze contrast
SpareRoom said UK lodger supply peaked after the last threshold rise in April 2016, then dropped during Covid and never fully recovered. Rooms let by live-in landlords average £515 a year cheaper than traditional landlord rooms, the site said.
Matt Hutchinson, director at SpareRoom, said no building is needed to add supply. “Not a single brick needs to be laid to boost lodger rental supply,” he said.
The call was covered by Mortgage Strategy, which confirmed the 2.9 percent inner-London fall and the Budget ask. SpareRoom’s own statistics page tracks the longer slide in lodger landlord ads.
Budget timing sharpens £11,000 threshold demand
SpareRoom has previously called for an £11,000 allowance. This follows Landlord Knowledge’s report on SpareRoom’s £11,000 Rent a Room demand in September, and record £769 room rents as supply fell earlier this month. The latest data extends that squeeze into the Budget week.
What this means for landlords
- If you let a spare room: the £7,500 ceiling still applies, so track receipts now in case the Budget moves it
- Watch for: Budget small print on Rent a Room, lodger income and wider landlord tax after Ireland’s move
- Bottom line: a higher allowance would lift live-in landlord supply fast, but do not price it in until confirmed
Editor’s view
Raising the threshold is the cheapest supply win on the table. It costs no bricks and helps renters quickly. Whether the Treasury listens this week will tell landlords how serious it is about supply beyond new-build promises.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 26 October 2026
Sources: SpareRoom, Mortgage Strategy
Related reading: SpareRoom: UK room rents hit record £769 as supply falls
