If you have a spare room in your home or a driveway you do not fully use, you may be sitting on an income opportunity. Both can generate meaningful money with relatively little ongoing effort.
Renting out a spare room — the Rent a Room scheme
The Government's Rent a Room scheme allows owner-occupiers and some tenants to earn up to £7,500 per year tax-free from letting out furnished accommodation in their own home. You live in the property, the lodger rents a furnished room.
- Tax-free allowance: £7,500 per year (£3,750 each if you share the income with someone else)
- Income above the allowance is taxable and must be declared via Self Assessment
- You remain responsible for your lodger's safety — smoke alarms, gas safety certificates and a written lodger agreement are strongly recommended
- Check your mortgage or rental agreement — some restrict sub-letting
- Platforms like SpareRoom, Rightmove and OpenRent list room rentals
Renting out a driveway or parking space
In areas with high parking demand — city centres, near train stations, near hospitals, sports venues — a private driveway can be rented out for meaningful income. Apps and platforms like JustPark, YourParkingSpace and ParkLet connect drivers with spaces.
- Income varies widely by location: a city-centre space can generate £50-£300+ per month
- Income is taxable above the £1,000 trading allowance — check HMRC guidance
- Check your deeds or leasehold agreement for any restrictions on commercial use
- Consider a simple written agreement with regular renters
Short-term lets and Airbnb
Letting a room or whole property on Airbnb can generate significant income but requires more active management. The Rent a Room tax-free allowance applies to short-term furnished room lets too. Rules around planning permission for entire-property short-term lets in some areas have changed — check your local council's guidance.