"Digs", once a mainstay of student accommodation, fell from favour in recent years as growing numbers of students plumped for the freedoms of flatland. But the chronic shortage of decent, affordable rented accommodation of late has forced more and more students to reconsider this traditional option.

The introduction in the last Budget of the rent-a-room relief, which allows people to let out a room in their home for up to £6,000 a year tax-free, has also boosted the market for lodgings and encouraged homeowners who would not have considered it in the past to think about taking in students.

Many of the State's third-level institutions are targeting the area following the new budgetary measures in a bid to address the difficult accommodation situation facing students.

UCD's Student Union has mailed 80,000 homes in the area around its Belfield campus in recent weeks seeking rooms for students and is very pleased with the response to date. The union estimates that around 6 per cent of the student population availed of digs in the 1999/2000 academic year, but this number looks set to rise sharply this year as other forms of accommodation become harder and harder to find.

According to Ms Brighid Bβn Breathnach, accommodation officer with UCD's Student Union, many students were reluctant in the past to move into digs, fearing it would restrict their freedom and be no different to living at home.

"But it's so difficult to find private rented accommodation that more and more people are turning to digs. It's easier to find than a flat or a house," she says.

The rent-a-room relief is also encouraging more and more householders to consider taking in lodgers. The relief applies to all payments, up to a maximum of £6,000 a year, in respect of the use for residential purposes of a room or rooms in an individual's sole or main residence.

In the current short tax year, which ends at the end of December, the limit is scaled back to £4,440. From next year, when the single currency is introduced, the tax-free threshold on renting a room will be €7,620.

The sums received can include payment for meals, cleaning, laundry and other such services.

While the letting of an entire house does not qualify for the relief, a self-contained unit that is part of the house, such as a basement flat or a converted garage attached to a house, does.

In addition, the residence does not have to be owned by the individual but can be rented accommodation. The only requirement is that it must be considered an individual's sole or main residence, by which the Revenue means a person's home, and the place where friends and correspondents would expect to find them.

Those with the bright idea of charging their children may find their path blocked, however. Although the Revenue says that whether a payment is rent within the strict meaning of the word will depend on the facts of each case, it also warns: "In the case of payments made by children in respect of the family home it is Revenue's view that, in general, such payments are not rent within the meaning of Section 473," the section that defines what rent is.

Also, would-be landlords should be aware that if the rental income is greater than £6,000 per annum, the provisions don't apply and they will be liable for tax on the whole sum.

So what kind of income can would-be landlords expect to make from taking in students?

The cost of digs varies widely depending on what part of the State the student finds himself in. Dublin digs are by far the most expensive, ranging in price from £50 to £120 for five days. The average price paid is around £75, although one householder quoted £155 per week for a room in a house in a salubrious area of Dublin 4.

Prices in the capital often do not include meals, although students can usually use the kitchen to prepare their own.

According to Ms Maura O'Neill, accommodation officer at University College Cork (UCC), students there pay between £68 to £73 for a single room for five days, rising to £83 for seven days. Twin-bedded rooms are slightly cheaper, at £63 for five days or £78 for seven days. These prices include breakfast, evening meal and light supper. Simple bed-and-breakfast accommodation costs around £45.

Prices in Maynooth, where digs account for around 25 to 30 per cent of the student accommodation, are broadly similar. Five days' accommodation in a twin room costs £63 per person, rising to £78 for seven days. A single room costs £66 for five days or £81 for seven days.

Aside from price, there are other issues to be taken into account by would-be landlords, such as the facilities to be provided.

Clean and comfortable accommodation, access to daily shower and bath facilities, adequate wardrobe, storage and shelf space, and adequate heat and study facilities are among the prerequisites.

Those planning to rent should also check that they are covered by standard public liability insurance, and fire and theft insurance before doing so. Those who take the plunge are advised to reach agreement with tenants on a number of areas in advance to ensure they don't end up out of pocket down the line.

For starters, landlords should always obtain full details of their tenants, including their full name, home address and telephone number, and their course and year of study.

Then they need to agree the financial details. Guidelines issued by NUI Maynooth suggest students pay the rent weekly in advance on a day agreed by landlord and tenant.

A deposit equivalent to two weeks' rent should be paid in advance while students should give two weeks' notice in writing if they intend to leave the accommodation.

Other areas that can prove contentious down the line include use of the house during the day, guests and use of the television.

Ideally, agreement should be reached on such issues in advance while UCC's accommodation office also suggests that dietary preferences or requirements are discussed where meals are being provided.

This is an area that frequently causes dissatisfaction as time goes by.

Most of those working in the area agree that the key to a harmonious relationship between student and landlord is in agreeing the ground rules at the outset.

"The more clarity there is at the beginning of the contract, the less trouble is likely during the year," says UCC's Ms O'Neill.

jmosullivan@irish-times.ie