Can I buy a house to rent to my lil sis on housing benefit?

squibbs25

I was lead to believe by my mother in law that if it is a proper business arrangement (drawn up officially/ taxed declared ect) then yes she will be able to get housing benefit as my sister in law was in simular circumstances approx 18 months ago.
I always thought you couldnt but i think it depends purely on individual circumstances.
Sorry i am no help really LOL

scarletjim

From all I can gather from googling examples, it seems the only, or at least main, problem is that I don't already own it and rent it out, so it is obvious that I'm buying it purely for her to rent, making it contrived. Is that right, can anyone confirm that this is the main or only problem? Or is there anything else I'm likely to fall foul of, given what I've already explained?

By the way, I would want it all drawn up officially and would be more than happy to go to the council with my sis and discuss with them if that would help.

socrates

scarletjim wrote: »

From all I can gather from googling examples, it seems the only, or at least main, problem is that I don't already own it and rent it out, so it is obvious that I'm buying it purely for her to rent, making it contrived. Is that right, can anyone confirm that this is the main or only problem? Or is there anything else I'm likely to fall foul of, given what I've already explained?

By the way, I would want it all drawn up officially and would be more than happy to go to the council with my sis and discuss with them if that would help.

I would ask this question over on https://www.landlordzone.com - there is a Housing Benefits Board - with both solicitors and HB Employees.

Also look at the LHA Bedroom Calculator to see exactly how much LHA she is entitled to:

https://lha-direct.voa.gov.uk/Secure/Calc.aspx

scarletjim

socrates wrote: »

I would ask this question over on www.landlordzone.com - there is a Housing Benefits Board - with both solicitors and HB Employees.

Many thanks for that - I've replicated my post there. The calculator confirms that my sis would be entitled to a 4-bed place, unfortunately it is not advanced enough to use location to give an actual amount but £900 sounds about right for a low end 4-bed in our area.

NB. If I find out anything new on the other site I'll post it here.

iamana1ias

scarletjim wrote: »

Oldernotwiser / Howard85, to provide further info on your questions:

1. If my sister could not or did not pay the rent, I woudl have no choice but to evict her and get some new tenants. That capital is my only savings, I cannot afford to let it sit not earning any interest / income therefore in real terms being eroded over time.

2. Her husband has medical issues that prevent him from working, and my sis can't work with 5 kids, most of whom are still quite young. I can't see them ever coming off benefits, certainly not in the next 10 years anyway, at which point we could reassess.

3. I have no idea how to prove this, but I would go ahead with a BTL irrespective of my sis, I have been looking to do so for the last 12 months or so, proving it would be tough, all I have is a). internet history over the last year :rotfl: and b). the fact that not many people would just sit on that amount of money in current accounts without locking it away to gain a higher rate of interest.

It's so frustrating because I can't see how what I'm proposing would do any harm to anyone.

Too ill to work but not too ill to make 5 babies? Brilliant :rolleyes:

And then you want to profit (from any increase in house price) from the taxpayers who would pay the rent/mortgage for you.

I think it's shocking if you're able to get away with this.

daska

iamana1ias wrote: »

Too ill to work but not too ill to make 5 babies? Brilliant :rolleyes:

And then you want to profit (from any increase in house price) from the taxpayers who would pay the rent/mortgage for you.

I think it's shocking if you're able to get away with this.

no need to be nasty, there's no info on here about how or when the husband became unable to work or the nature of his illness.

socrates

scarletjim wrote: »

Many thanks for that - I've replicated my post there. The calculator confirms that my sis would be entitled to a 4-bed place, unfortunately it is not advanced enough to use location to give an actual amount but £900 sounds about right for a low end 4-bed in our area.

NB. If I find out anything new on the other site I'll post it here.

It is sophisticated enough to tell you exactly what the weekly LHA is - if you enter any postcode in the area you are looking to purchase the property.

https://lha-direct.voa.gov.uk/Secure/LHARateSearch.aspx?SearchType=PostCode

Anthillmob

scarletjim wrote: »

That's contradictory to all the previous threads on this issue. They say there are circumstances where it is possible.

you are asking for a workaround on a benefits board. dont think for one minute the workaround would go unnoticed. we are trained to spot a contrived tenancy. accepting a lower rent if your sister was skint would be one of them for starters.

and we wouldnt be calling you for interview, which we do for all tenancies we 'suspect' could be contrived/landlord is a relative. and the claimant, no matter how 'clued up' they are by the landlord prior to the interview will 9 times out of 10 slip up.

remember also we can carry out land registry searches and the like. we are very thorough.

i understand the predicament they are in with only having a 2 bed house but please consider the seriousness this could lead to.

Anthillmob

scarletjim wrote: »

From all I can gather from googling examples, it seems the only, or at least main, problem is that I don't already own it and rent it out, so it is obvious that I'm buying it purely for her to rent, making it contrived. Is that right, can anyone confirm that this is the main or only problem? Or is there anything else I'm likely to fall foul of, given what I've already explained?

By the way, I would want it all drawn up officially and would be more than happy to go to the council with my sis and discuss with them if that would help.

buying a property to specifically rent to a relative is a big no-no

scarletjim

iamana1ias wrote: »

And then you want to profit (from any increase in house price) from the taxpayers who would pay the rent/mortgage for you.

I think it's shocking if you're able to get away with this.

What on earth are you on about? If I bought the same place and rented it for £1000pcm then I'd make more money out of it. Meanwhile my sis would find another place for about £900pcm and the taxpayers would pay that anyway, so your point makes absolutely no sense!

For what its worth, I don't agree with the level of assistance they are allowed, or with his supposed 'illness' but a). that's not what is being discussed here and anyway b). it is of no additional benefit to me vs a normal BTL. :mad: