The number of retired homeowners taking in lodgers has more than tripled over the past 10 years as pensioners seek alternative sources of income amid rising financial pressures.
Over three per cent of people aged 65 and above reported having a lodger in 2025.
This represents a threefold increase compared with 2015, highlighting a growing trend among older homeowners to rent out spare rooms.
The increase has accelerated significantly in recent years.
The figures analysed SpareRoom indicate that the number of live-in landlords aged 65 and above has risen by 38 per cent since 2023 alone.
Experts say rising household costs and barriers to downsizing are encouraging retirees to remain in their existing homes and generate additional income instead.
Nigel Bishop, Managing Director of buying agency Recoco Property Search, said: “Especially over the past years, amid economic challenges and the rising cost of living, people have been opting for alternative solutions such as becoming a live-in landlord.”
From April 2025 the stamp duty nil-rate threshold was reduced from £250,000 to £125,000.
Property transaction taxes have been identified as a major obstacle for older homeowners considering downsizing
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This change means buyers must pay stamp duty on property purchases above £125,000.
The levy then applies at increasing rates beginning at two per cent and reaching 12 per cent for properties valued above £1.5million.
An additional surcharge on second homes also increased from three to five percentage points in October 2024.
Mr Bishop said the costs involved in moving are discouraging many retirees from relocating.
“Stamp duty stops people in their tracks. They are already dealing with the practical and psychological stress of moving, and then to add the economic element makes them not want to do anything.”
Limited housing supply has also contributed to the trend.
In 2023, the National House Building Council warned that bungalows were becoming “critically endangered” following decades of declining construction.
Research from HomeOwners Alliance suggests that 1.2 million property owners aged 55 and over have abandoned plans to move during the past two years despite previously considering relocation.
Financial organisations have previously called for targeted stamp duty reforms to encourage older homeowners to downsize.
Supporters of such measures argue that reducing the tax burden could help free up larger homes for first-time buyers and families seeking more space.
Dennis Reed, director of campaign group Silver Voices, said: “Pensioners are forced to stay in their large, expensive and unsuitable family homes rather than freeing them up for younger families.”
No Government has yet introduced specific stamp duty incentives aimed at encouraging downsizing.
Homeowners who take in lodgers can benefit from the Rent a Room Scheme.
The scheme allows individuals to earn up to £7,500 per year from renting out a spare room without paying income tax.
However, the tax-free threshold has remained unchanged since 2016.
Matt Hutchinson, global communications director at SpareRoom, said adjustments to the scheme could encourage more homeowners to participate.
Single-storey homes have become increasingly scarce in the UK housing market
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“The last time the rent-a-room scheme was altered, supply rose and remained at healthy levels until the pandemic. A booster shot in the arm is what’s needed now.”
He added that administrative requirements such as completing tax returns can deter potential live-in landlords.
Mr Hutchinson said the tax-free allowance should reflect current rental values in order to increase participation.
Despite the growing interest in lodger arrangements, the number of available rooms has recently begun to fall.
SpareRoom reported that room listings were 2.5 per cent lower in January 2026 compared with the same month the previous year.
The drop represents the first decline in listings since the rental market was disrupted during the coronavirus pandemic.