Online House Hunting - Is it possible to rent out a part of my house which I have bought on residential Mortgage?

Is it possible to rent out a part of my house which I have bought on residential Mortgage?

I have recently bought a house on Residential mortgage which means that I will use the house to live in as apposed to Buy to Let mortgage in which you can rent it out to others. What if I stay in the house and rent out 1 of the rooms to a friend or stranger without any formal contract. Is this a common practise?

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Very common As long as you are residing in the house, you can rent out a room to a lodger.
Yes you can - and it is tax free for just one room rented out.
Yes under the Rent a room scheme you can rent out a room tax-free for £4250 per year. Anything over and you would have to declare it. You don't need a formal contract but you must let your mortgage lender know that you want to rent out a room but you should have no problem. I currently rent out a room to a friend for £340pcm which is within the tax-free threshold and still covers my mortgage and electric per month.
As Andrew says, but you are not required to inform the loan company as the other person will be a lodger with no security of tenure. If you were to move out it would be entirely different as a tenancy in law would be automatically created, even if there were no signed agreement. In this case the mortgage provider would foreclose and repossess the house without hesitation. With a lodger, whilst an agreement is not needed it is wise to draft a simple one to lay down 'house rules'. This ultimately makes life easier as it can eliminate misunderstandings and irritation. For example, you may wish to ensure that they wash up, do their own cleaning, keep noise down, not invite guests, pay on the due date etc etc. None of this affects your right to evict them as and when you choose without notice and without recourse to the courts. You can get model lodgers agreements off the net if you search the term.
It's 100% fine, so long as it fine with your lender. You should have received a copy of your mortgage contract- review this! You should have already done this. If you don't find it mentioned, it's probably fine-- but you can always call up your lender for a quick answer.
Yes, you'll be fine. Anyone who shares the house with you is an 'excluded occupier' and therefore has next to no tenancy rights. Because of this, it won't be a problem to your lender. You will need to inform your insurer though as they need info on who has access to the property for risk assessment. (Failure to do so will probably invalidate your insurance) I do suggest you have a contract of sorts to protect yourself, here's a free one off the internet http://www.routledgelaw.com/pocketlawyers/YouAndYour/02%20Lodger%20Agreement.doc
Renting out a room or a portion of your house to help pay for expenses is very common. There may be laws and / or policies where you live that you may need to be aware of for this.