How to help unemployed single mum onto the housing ladder?

astonsmummy

Cold she not get a council house then when she is financially stble buy it?
Even with some - maybe all housing associations, you can buy them (think it's through homebuy - shared ownership)

If the house she is renting in in bad condition she would be more of a priority

UK007BullDog

From experience most lenders do NOT want relatives living in BTL due to the many reasons already mentioned above. Also you need to think of other costs, not just the mortgage. Right now the Housing association she rents through will look after the place even if it means she has to call them multiple times to get it sorted. If something goes wrong in the bought house she will be calling on you to fix things as she does not have the money to pay for it herself.

Also who is going to look after the kids whilst she is in training/working? I understand that you want to help her and the kids but it will cost YOU more than you might have bargained for in the long run.

I would concentrate on getting her to work and support her with childcare. Having a house at this time will not help her and might just put your finances in jeopardy. A mortgage like that you are looking at anything at around £850 per month repayment.

If you do a BTL mortgage then the rental income has to fit up to 130% of the mortgage payments. But most lenders dislike any "family" deals.

My motto is never to do business with friends and relatives as it might turn sour.

Ems*Honie

Clydesdale bank do offer a buy to let mortgage that allows you to rent to a relative. Most others do not, you have to specificaly sign to say you are not renting to family.

Ensure you are paid rent in advance so if there are any hiccups you have a month to reach agreemant and try to find a solution. Be prepared to take her to court if she doesn't pay her rent, her not paying rent is more an abuse of the relasionship than your taking her to court after the fact.

Have an emergenncy pot in which all involved put into incase there is ever a time she cannot pay rent as oppossed to will not pay.

Keep in mind that when she goes back to work after college her rental affordability may suffer until all the benefits etc are balanced back out.

Edited to add that Bulldog has excellant points, he oly reason we rent to family is because of disability, so its a situation that isn't likely to change for a long time.

RHemmings

jakehamble wrote:

So is the general consensus then that paying the extra for a mortgage, leading to house ownership at the end of it, is not worth paying the extra compared to renting the equivalent property? I'm just afraid that another 5 years down the line it will be so completely impossible that I will kick myself for not finding some way to help her do it now.

But given the figures you quote it already looks impossible. Basically unless you can get together and give her enough money to buy a house without her contributing much of anything at all, then it's hopeless.

But look at the rental yields your figures suggest. If you say the cheapest possible house is £133,000, and she's paying £500 a month rent, then that's a yield of 4.5%. For that rent to support a yield of 8%, the house would have to be valued at £75,000. Is the population in Wales and the town where she lives increasing? Are there new businesses opening up paying mega-wages to support these higher house prices? Is there no building of new properties which could lead to over-supply? Or is it all a speculative bubble that will end in tears?

heathcote123

I too want to buy a house, and had thought I'd need to put in hard work for many years to do so.

However seeing this thread, it would seem I can simply jack my job in, and get tax payers to do the job for me via housing benefit. Preferably while I sit around playing playstation.

You really couldn't make this up - you lot encouraging this should be shot.

seven-day-weekend

black-saturn wrote:

A mortgage lender will be OK with a house let to family. It's just a buy to let mortgage like any other and you can pay housing benefit to a family member as long as they act like a proper legal landlord and they have a proper legal tenancy agreement.

When we rented our BTL to our son, HB would only pay if we could prove that the property had been bought as a BTL (which we could - it had a BTL mortgage and had been advertised for rental with an Estate Agent). He also had to have a proper tenancy agreement.

If the house has been bought as a family home (not a business venture) by a family member then AFAIK HB will not pay if it is rented to another family member.

real1314

seven-day-weekend wrote:

When we rented our BTL to our son, HB would only pay if we could prove that the property had been bought as a BTL (which we could - it had a BTL mortgage and had been advertised for rental with an Estate Agent). He also had to have a proper tenancy agreement.

If the house has been bought as a family home (not a business venture) by a family member then AFAIK HB will not pay if it is rented to another family member.

It doesn't matter how or why the property was acquired.
What matters is how it's being treated at the time. If it's being rented out commercially, then it can be to a family member (there are a few exceptions - mainly relating to couple who've split up).
The family member could rent from another private landlord, they'd still have to pay HB and the family landlord would be able to rent to someone else. The advantage to the family connection is that there is a degree of trust between the 2 parties.

Most LAs do not worry too much about "family" rentals in my experience, after all, who would, or could afford to, maintain a property for no return? Apart from the Queen and the Duke of Westminster of course.

richgirl

Am I the only one wondering why the state should pay for your sister to buy / own a house ?

Housing benefit should not be used as a means of purchasing property even through the backdoor !

jakehamble

richgirl wrote:

Am I the only one wondering why the state should pay for your sister to buy / own a house ?

Similarly you could ask why the state should fund the income of a private landlord, who is profiting from the HB scheme. But surely it makes more sense to empower people of lower income to make a step towards independence and self-sufficiency.

The current system makes it very difficult for those in the poverty trap to escape. Rising house prices have exacerbated that problem.

If one way or another the state needs to assist in housing those less well off, surely it makes more sense to do it in a way where they'll need to contribute less in the future? Otherwise it's only the rich that carry on getting richer.

noyk

jakehamble wrote:

Similarly you could ask why the state should fund the income of a private landlord, who is profiting from the HB scheme. But surely it makes more sense to empower people of lower income to make a step towards independence and self-sufficiency.

The current system makes it very difficult for those in the poverty trap to escape. Rising house prices have exacerbated that problem.

If one way or another the state needs to assist in housing those less well off, surely it makes more sense to do it in a way where they'll need to contribute less in the future? Otherwise it's only the rich that carry on getting richer.

Well said - things are more complex than they may initially appear, especially with social equality degrading at a considerable rate. However, in my opinion the OP would be advised against buying for many reasons stated earlier in the thread - primarily: it doesn't make financial sense.