Are you feeling the squeeze? Five interest rate rises in a year have sent mortgage repayments soaring for the hundreds of thousands of homeowners stuck in variable-rate deals. Investors, meanwhile, have seen the value of their portfolios tumble in weeks of stock market jitters. Here Times Money suggests the easiest ways to boost your income.

Unlock the value in your home

A simple way to make an extra £200plus a month is to let a room. The Government’s Rent a Room scheme allows homeowenrs to make up to £4,250 a year tax-free. Sophy Silver, of Gumtree.com, the classified advertising and community website, says that the number of room listings on the site has climbed by 79 per cent in seven months, which she believes is a result of rising mortgage rates.

Melanie Bien, of Savill’s Private Finance, the mortgage broker, points out that you should notify your lender if you plan to let a room but adds: “It is a courtesy and should not be a problem.”

You must also inform your home insurer, which may charge a small increase in premium. If the rent is at or below the threshold of £81.73 a week, you need not declare it to the taxman. If it is above the threshold, you must contact your tax office and complete a tax return.

Your lender may check that you have a tenancy agreement. This is an essential document that should be drawn up by a solicitor. It will set out the rent, notice periods, details of facilities shared and bills included. Lodgers are classed as “excluded occupiers” and can be evicted with relative ease, but Ms Silver advises homeowners to follow up references.

There is no need to use an agent to rent a room. If you cannot find a lodger through word of mouth, free websites, such as Gumtree and Craigslist.org, can do the job. To find someone fast, Ms Silver advises homeowners to give a detailed description of the room, with photographs.

Claire Culshaw makes £450 a month renting a room in her two-bedroom flat in Woking, Surrey. This covers more than half of the £850 repayments on her Alliance & Leicester mortgage. The 28-year-old, who is now firm friends with her lodger, says: “It is great for us both, and I am more confident now that I will be able to afford higher repayments when my fixed-rate mortgage deal ends next autumn.”

There are other ways to cash in on your home. The easiest is to let a garage or parking space. You can advertise these on specialist websites such as YourParkingSpace.co.uk . Use of a garage in Bromley, Kent, is advertised on the site at £50 a week.

A lucrative, if disruptive, option is to let your home for film shoots at a daily rate of £1,000plus. For more information, go to www.lavishlocations.com , the website of one of the leading companies in the field.

Work your weekends

Part-time work is another way to top up on cash. Thousands of evening and weekend opportunities are listed at Gumtree.com and at job websites, such as Monster.co.uk . These include stewarding at sports and entertainment venues for £5 to £10 an hour. More traditional options include babysitting and dog walking. Both pay upwards of £6 an hour.

Being paid to party sounds too good to be true, but sociable types can earn thousands of pounds a year selling products from retailers such as Ann Summers and The Body Shop at themed parties in customers’ homes. “Consultants” make a cut on each item sold. One consultant for Body Shop at Home – a mother of three – left her job as an insurance clerk to organise parties full-time and now earns more than £120,000 a year from the scheme.

Tracey Reece’s case is more typical. The 38-year-old administrator, of Flintshire, North Wales, joined The Body Shop at Home as a consultant in 2004 and has risen to become an area manager, recruiting new consultants and running parties. She says that the extra income has softened the impact of rising repayments on her tracker mortgage with Abbey. She also likes the flexible hours and the chance to meet people.

Zoe Cook, of The Body Shop, says that most consultants earn about £3,500 a year after tax, running two two to three-hour parties a week. Details of the scheme can be found online at www.thebodyshop.co.uk .

Consultants on the scheme are self-employed and must pay their own tax and national insurance. Visit the Revenue website at www.hmrc.gov.uk , or call its self-assessment help-line on 0845 9000444.

Offset savings

Borrowers who have a significant sum in savings can reduce their monthly repayments or clear the mortgage early by switching to an offset loan.

These mortgages pool all your savings and borrowing in one account to reduce your total debt. Experts used to say that offsets were best for those with savings equivalent to at least 10 per cent of the loan, but Melanie Bien, of Savills Private Finance, says that this is changing.

A homeowner with a £130,000 offset repayment mortgage on a 25-year term with Intelligent Finance can reduce the effective interest rate from 5.84 per cent with no savings to 4.94 per cent with savings of £20,000.

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