Renting out my house and renting elsewhere

Mothermoo_2

I own a house, but got relocated to other side of country, therefore, we are now renting elsewhere. I have a friend who'd like to rent this other house, I thought it was going to be cash in hand, what he could afford etc, but now he's planning to claim his rent back (he's a single parent who is presently a stay-at-home dad) so obviously will need to be all declared etc. What kind of forms etc will I need to fill in for him to get the benefit?

Also, from looking through this site, I see you pay tax on rental income, this will put me over the 40% bracket combined with my salary, will I pay 40% on this money?

To further confuse matters, I am not the sole owner of the property, my ex is still named on mortgage etc, he does not contribute towards the mortgage payments (but I do get CM from him), I have no idea where he is, do I have to change the mortgage to a BTL? Or just tell the provider? Can I do it without the ex's knowledge/agreement?

simpywimpy

you can pick up an assured shorthold tenancy agreement from whsmiths and fill it in at the market rent.

You will also need a gas and electricity safety certificate.

Youonly pay tax on the profit from the rental so that will be minus fees and expenses plus mortgage interest.

You may also need to get permission from your mortgage provider to

Mothermoo_2

simpywimpy wrote: »

you can pick up an assured shorthold tenancy agreement from whsmiths and fill it in at the market rent.

You will also need a gas and electricity safety certificate.

Youonly pay tax on the profit from the rental so that will be minus fees and expenses plus mortgage interest.

You may also need to get permission from your mortgage provider to

Thank you, that's incredibly helpful, can I take off the actual cost of the mortgage payment from profit, or just the amount of the interest? (sorry if that's really dumb question!)

Is it different renting to someone claiming the rent back than it is to someone just paying normally?

Thank you

t_obermory

I may be wrong here but I thought that you needed a buy to let mortgage instead of a standard residential one if you're planning on renting your house out.

I assume by claiming back he means housing benefit; in which case they'll assess what he's entitled to and it can be paid directly to you or to him, it will take a few weeks for them to sort it all out.

clutton_2

housing benefit is now called local housing allowance and goes to the tenant - the landlord does not get the money directly, nor can the landlord get any information about the application - data protection and all that

you are a new amateur landlord, trying to enter a business you know nothing about - get an agent who is a member of a professional association - then join national landlords association and read all about being a landlord

read https://www.singingpig.co.uk and https://www.landlordzone.co.uk to read about some of the pitfalls you will face

Mothermoo_2

Thank you all, yes I do mean LHA!

I suppose I am trying to start a business I know nothing about, but we all have to start somewhere. I was doing it originally as a favour for a friend after a bereavement, but he will not move in without contributing, hence my need to make sure I won't inadvertantly defraud the tax office/mortgage provider

clutton_2

over the years i have learnt never to house friends - but if you do, you must do this legally otherwise you may not be able to get them out - tenants have many many rights and you cannot simply say "i want you gone" and they go. you have to take them to court to get them out and this can take months and months and cost thousands if you dont know what you are doing

simpywimpy

I believe its just the interest you can claim as an expense as well as repairs etc but not upgrades.

It's not easy and be prepared to have a reserve for unexpected repairs. We have had a tenant for just less than 3 weeks and already the boiler broke down!!! It was only 18months old too.