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The government would like to thank all those who responded to the call for evidence on rent a room relief. This document summarises those responses and sets out the policy change the government now intends to make.
Rent a room relief was first introduced in 1992 to incentivise individuals to make spare capacity in their homes available for rent. The government intended this to increase the quantity and variety of low-cost rented housing.
In the last 25 years the housing market has changed significantly: there has been an overall growth in the number of people living in the private rented sector (PRS), whilst the emergence and growth of peer to peer online marketplaces and digital platforms has made it easier to advertise rooms, putting those with spare accommodation in touch with a global network of potential lodgers.
Given the pace and scale of change in the sector, the government wants to explore whether the design of rent a room relief provides the right incentives for the rental market as it exists today.