Boost your finances by taking in a lodger The friendship between a landlord and his lodger was immortalised in the 1990s sitcom Men Behaving Badly, when hapless Gary took in equally hapless Tony to help fund his mortgage. But now more and more people are looking to follow in the footsteps of the unlikely pair as an increasing proportion of Scots look to boost their income by taking in a lodger. Last month the number of people north of the Border opting to open up their spare rooms to a complete stranger rocketed by 16 per cent compared to the previous year, new data has revealed. Spareroom.co.uk, which matches prospective tenants with available flat and house-shares, found that 6,000 new homeowners rented out spare rooms last month, UK-wide. The organisation believes that the rise is due to homeowners struggling to meet the cost of living amid spiralling utility bills and a depressed jobs market hoping to earn some extra money to help with their mortgage and other expenses. "Millions of people across the UK will be struggling to pay off loans and credit card debts - and that's on top of paying ever-increasing living expenses from mortgages to heating bills and the weekly food shop," said Matt Hutchinson, director of Spareroom.co.uk. If that isn't bad enough, unemployment is still rising and the economy is showing little by way of improvement. It's not surprising that the lodger population is expanding so rapidly as homeowners look for ways to boost their incomes. With the government's Rent A Room scheme, allowing people to earn the first £4,250 per year without declaring any tax on the income, it is still one of the easiest ways to earn some extra cash. The Rent a Room scheme is open to anyone who rents out a room - or a floor - of their main property, as long as the leased accommodation is not a separate flat. Both homeowners and tenants are allowed to use the scheme as long as renters have prior approval from their landlord. However, the tax-free portion of the scheme is only open to people who do not already fill out a tax return as they have an automatic exemption. The average income from taking in a lodger is around £342 a month in Scotland, the report revealed - compared to a UK average of £348. In Edinburgh, where demand for rented accommodation has rocketed in recent months as fewer people are able to get on the housing ladder due to decreased mortgage availability, average monthly rent from a lodger is as high as £394 a month. "For some people the monthly income from a lodger will be the difference between losing their home and keeping it," added Hutchison. In parts of the country where demand for rented accommodation is soaring, live-in landlords are helping to ease the pressure on the rental market by providing an additional supply of rooms to meet increasing tenant demand. The UK's lodger population has exploded in the past five years. Last year saw a record number of new homeowners taking in lodgers, up 14 per cent UK-wide on 2010, and more than double the new lodger numbers of 2007. Shelter Scotland, which recently launched an online advice service which includes a free, downloadable lodger agreement for homeowners across Scotland who are thinking about renting out a spare room, said its own research showed that more than 40,000 people in Scotland let out a room in their home in the last year. "These figures show that as household finances come under further strain, increasing numbers of homeowners are looking for innovative ways to maximise their income," said director Graeme Brown. For many, the experience can be a positive one and can provide a welcome stream of additional income. But he warned that prospective landlords should consider the pitfalls before taking in a lodger. "Before taking in a tenant, however, homeowners should consider the legal and personal implications; does their mortgage provider allow them to rent out their property, do they have adequate insurance and what are the tax implications," he said. Also, are they happy to share their home with a lodger and accept the day-to-day changes this will bring? John Blackwood, director of the Scottish Association of Landlords, added: "We have definitely heard of more and more people in Scotland taking in lodgers to help pay their bills. In the current economic climate, people are maximising income from every asset they have, including any spare rooms they have in their property. However, we would urge landlords to ensure that they have drawn up a clear occupancy agreement with anyone who pays them for a room.