BTL For Ex and Child?

chambta

Not sure if it's feasible in the present climate but thought I'd run something by you all for any ideas or advice you may have.

My ex-partner is on the local council's waiting list for a property but it seems to be taking forever. I want to do what I can to ensure my child gets brought up somewhere decent for obvious reasons.

In my town looking at Rightmove it seems passable 2 bed terraces in half decent locations can be got for £75-80k now. Max LTVs on BTLs now seem to be 75% unless I've missed something. I have around £10k in savings and could possible extend the mortgage on my present property at a good rate (I work for a High Street Bank) by maybe another £10k. This leaves margins pretty tight but other than my own mortgage I have no other credit commitments.

Should we do this she would be in receipt of housing benefit to cover the rent that I'd charge. To the council this may look suspicious but obviously there'd be nothing underhand at play-would this cause any problems? I estimate that on interest only I'd actually be in credit by £100+ with rental income likely to be £450ish. What other considerations are there in becoming a landlord in this way?

It may not happen but it could be a situation to suit all concerned.

Thanks in advance.

Ian_Griffiths_Halifax

Before doing anything else, I'd get your ex to contact the Housing Benefit people to check out what you are looking to do. You don't want to find that she/you have to give them back a hefty sum or face an investigation in the future, when you can get clarification from the start.

All it takes is for one nosey neighbour to call them once she's moved in and tell the Housing people that she's renting off the childs father and that could cause you a lot of grief.

You don't say whether your ex is your ex partner or ex wife. If she is your ex Wife are you Divorced?

If you have a good credit rating, then I can't see you having a problem getting a BTL mortgage at 85%.

olly300

Firstly councils set up housing benefit rules which means people in this type of arrangement are excluded from claiming housing benefit as they don't like people setting up an arrangement just to claim housing benefit. You need to actually check with your council. So it may be fine in theory but you won't actually be illegible to receive money from housing benefit, or if you are, it will be at a much reduced rent which means your sums won't add up.

Secondly another real consideration in becoming a landlord in this way is renting to family. However nice your ex is until you have monetary dealings with someone you don't know how they will act. Unfortunately the nicest people can turn nasty while the people who you think may screw you are actually really decent to deal with.

For example if you have an argument over the child and the housing benefit is paid to her, then she could decide not to pay the rent. Also what happens if your ex gets a new partner or something happens which means that she can't pay the rent. Are you going to evict your own child?

Also as a landlord you have to fix things as soon as they are broken and if you are on a tight budget you are not likely to have the funds to do this, which will cause arguments.

elmer

You cant claim Housing Benefit or LHA if a child in the household is a child of the landlord.

Thanks Elmer

tsstss7

What elmer says is true - it's a non starter I'm afraid unless they change the hb rules...however if she goes onto tax credits and was earning enough to not need hb then it would not matter who owned the house.

Tiddlywinks

chambta wrote: »

My ex-partner is on the local council's waiting list for a property but it seems to be taking forever. I want to do what I can to ensure my child gets brought up somewhere decent for obvious reasons. Can't you help out with renting privately then? It's your child so you should do whatever you can regardless of what the council can or can't do for your ex. Surely you have a primary responsibility here for the care and welfare of your child?


I have around £10k in savings and could possible extend the mortgage on my present property at a good rate (I work for a High Street Bank) by maybe another £10k. Great, then you have the means to support your child without relying on the local authority.

I estimate that on interest only I'd actually be in credit by £100+ with rental income likely to be £450ish. Nothing "underhand" intended yet you still hope to make a profit from putting a roof over your own child's head? That sounds pretty cold and calculating to me.

What other considerations are there in becoming a landlord in this way?

Your child, your responsibility. You have the means, you are a home owner and have a good stable job. So WHY is it up to the council to look after your child.

Also, why do you want to profit from the venture?

Tiddly

tbs624

chambta wrote: »

My ex-partner is on the local council's waiting list for a property but it seems to be taking forever. I want to do what I can to ensure my child gets brought up somewhere decent for obvious reasons....

In my town looking at Rightmove it seems passable 2 bed terraces in half decent locations can be got for £75-80k now. Max LTVs on BTLs now seem to be 75% unless I've missed something. I have around £10k in savings and could possible extend the mortgage on my present property at a good rate (I work for a High Street Bank) by maybe another £10k. This leaves margins pretty tight but other than my own mortgage I have no other credit commitments.

Should we do this she would be in receipt of housing benefit to cover the rent that I'd charge. To the council this may look suspicious but obviously there'd be nothing underhand at play-would this cause any problems? I estimate that on interest only I'd actually be in credit by £100+ with rental income likely to be £450ish. What other considerations are there in becoming a landlord in this way?

As Elmer has mentioned above LHA/HB would not be paid in these circumstances and quite rightly so.

You seem to be suggesting that taxpayers money be used to pay you to provide a roof over your child's head. You could consider paying a greater sum of money to your ex-partner to improve your child's lot in other ways, or sharing his/her upbringing in a way that will allow time for your ex-wife to go back to work.

chambta

Tiddlywinks wrote: »

Your child, your responsibility. You have the means, you are a home owner and have a good stable job. So WHY is it up to the council to look after your child.

Also, why do you want to profit from the venture?

Tiddly

I don't want to profit from the venture-I just want to make sure I don't lose money. Big difference.

Who said it's up to the council to look after my child? Rather judgemental aren't we? My partner who has chosen to split up with me will not be working and therefore WILL be claiming housing benefit WHATEVER the situation. My financial standing has absolutely no bearing on this whatsoever. Are you somehow suggesting I should pay the rent for this on top of my own mortgage!? In your haste to cast judgement you really haven't thought through anything you've said.

Anyway from what's been said it's not going to be possible.

chambta

tbs624 wrote: »

As Elmer has mentioned above LHA/HB would not be paid in these circumstances and quite rightly so.

You seem to be suggesting that taxpayers money be used to pay you to provide a roof over your child's head. You could consider paying a greater sum of money to your ex-partner to improve your child's lot in other ways, or sharing his/her upbringing in a way that will allow time for your ex-wife to go back to work.

Taxpayers money WILL be used to pay for her rent. That's not my decision. You obviously want to redesign the country benefits system. I will be paying maintenence of course but that won't affect her entitlement to benefits. Are you suggesting she turns those down? My responsibility is to provide my share towards her upbringing and that's what I'll be doing.

Gorgeous_George

All good advice I guess but worth checking anyway.

Another issue. Would you be prepared to evict them if she stopped making rental payments? What if she had a new partner? If the answer is 'No', don't be her LL.

GG

asandwhen

Why do you need to be the landlord? why doesnt she find a nice rented house owned by someone else and get ousing benefit for that? surely if she is renting privately then she can choose where she wants to live anyway.