Back when the markets were booming, the pied-à-terre, a Central London flat for use during the week, was almost a requirement for City high-flyers, corporate lawyers and the like. But in these straitened times, many of these London boltholes have been sold off: you either have to commute back to Surrey or Sussex, or shell out for a hotel. But there is a third way: the crash pad.

Crashpadder.com was set up late last year by Stephen Rapoport, a former online marketing executive who spotted a gap in the market: an opportunity offering people with spare rooms to make a bit of cash to supplement the mortgage repayments, while offering everyone from backpackers to business travellers a cheap and comfortable alternative to hotels, hostels and bed & breakfasts.

All you have to do is register with the site, which is free, and list your spare room (or spare sofabed in the living room; there are no strict rules on the quality of accommodation). You quote a price, which you determine, and wait for someone to book it. People looking for properties to rent must register their details, which is also free, and then can start searching for an appropriate room.

Although the site was set up less than a year ago, it lists 1,500 rooms in 40 countries worldwide, although just over 1,000 of these are in the UK and, as you might expect, are concentrated in the big cities — London, Manchester and Birmingham have the most properties.

“When I first started the site I expected most of the guests to be backpackers and the hosts to be people in their early twenties,” Rapoport says. In fact, the profile has been slightly different. Most of our hosts are young professionals in their late twenties and thirties. We have a lot of domestic business travellers, probably because businesses are cutting back on expenses. Through our site you can get a room in Central London for as little as £20 a night; even a budget hotel will cost up to £100.”

More and more of Crashpadders’ hosts (known as “Padders”; the guests are “Crashers”) hail from the financial sector. “The finance sector has been one of the worst hit in the past 12 months,” Rapoport says. “So many bankers are making use of the excess space in their swanky homes as cheap hotel alternatives. We’ve seen a 17 per cent increase in hosts who work in the finance industry. Many have flats in desirable areas, such as Chelsea.”

The increased popularity among professional homeowners is a trend that has also been reported by Crashpadder.com’s longer-established rivals. Judy Niner, a founder of mondaytofriday.com, says that the number of people offering rooms on the site is up 100 per cent in a year — and those looking for a room is 300 per cent higher. She says: “We were always aimed at professional people, but whether it is fashion. or teaching or the NHS, people are now having to take jobs that are farther from home.”

Matt Hutchinson, a director of spareroom.co.uk, says that empty nesters and affluent pensioners were increasingly advertising for lodgers on the site, with those aged 55-64 up 98 per cent in a year. He said: “For many in this age group, their home is the only asset they have and they need to make money from it. But our biggest age group remains the young professional, aged 25 to 34 who may have taken on a mortgage at a high income multiple before the credit crunch and now needs to underwrite that.”

Guy Phillips, 26, who works for Santander Corporate Banking, is just such a homeowner and is one of Crashpadder’s hosts from the financial sector. He and his girlfriend, Katharine Le Hardy, 28, a professional artist, decided to rent out the spare room in their two-bedroom flat in Earlsfield, South London, in January this year. “We did have a tenant, a friend who was renting out the room, but we decided that we would like to have the spare room free on weekends so that family and friends could come to stay,” Phillips says. “We decided that short-term lets would be ideal; we could rent the place during the week to earn a bit of extra money, while keeping weekends free.”

While the idea of letting a stranger into your home is not for everyone, Phillips says that he feels confident that the payment process — which requires a full payment by credit card in advance, or a 10 per cent credit card deposit followed by a cash payment — provided adequate security. “The banker side of me assessed the risk. Because the money is being paid upfront, there is a credit or a debit card trail. It’s quite difficult to set up a bank account; it’s unlikely that people would go to all that trouble — there are easier ways to rob someone” However, having said that, he and his girlfriend have not accepted all reservations. “We’re quite picky,” he says. “A lot depends on whether we are feeling friendly and sociable. We are not dependent on the extra money, so we have turned down a couple of characters.”

Padders can look at Crashers’ profiles on the Crashpadder website — many will have links to other social networking sites. There is also a feedback system, similar to the one on eBay, for Padders and Crashers. Rapoport recommends that members vet their potential hosts or guests carefully, checking out their profile, getting in touch and asking plenty of questions.

He also recommends that hosts and guests tell a friend what they’re up to, just to be on the safe side.

Fast facts

Anyone with a spare room (or a spare sofabed) can list their offering on Crashpadder.com.

Mondaytofriday.com is free for lodgers, but homeowners are charged £29.95.

Spareroom.co.uk is free to use, but advertisers can pay more to upgrade their listing.

The income you gain from renting out residential property is taxable. However, the rent-a-room scheme allows you to earn up to £4,250 a year tax-free.

You are eligible for the scheme provided you are letting furnished accommodation. However, if part of the property has been converted into a separate flat, the tax relief no longer applies.

If you are part of the rent-a-room-scheme you cannot claim expenses relating to the letting. If you have incurred significant expenses, you may wish to declare your income, in which case you are permitted to claim tax relief on mortgage repayments, repairs, insurance and letting agency fees, as well as on 10 per cent of your total annual rental income to cover depreciation and advisers’ fees.

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