Housing benefit, renting from my Mum

Jam0r

Quick run down of the situation:-

Mum owns a 3 bed house, has a mortgage but doesn't earn enough to live there on her own, she has rented the house out to a friend in the past before however has no proof apart from bank statements showing rent, the agreement was a verbal one (don't get me started).

She can't afford to sell the house as she believes it's in negative equity, which it probably is. Mortgage payments are from what she's told me, around the £700 a month mark.

On the 1st April 2010, myself, my girlfriend and her child moved into the house, my mother moved out and went to live at her parents. We have a 6 month agreement which was drawn up by an Estate Agents so everything is legit and we pay a rent of £550 a month. Yes we could have rented another property however the location is ideal for us (school is opposite) and at the same time I get to help my mum out.

We originally applied for Housing Benefit through our local office when we first moved in, filled in the forms but got no reply from them, heard nothing back.

I work full time and my gf works part time and although we are coping at the moment, having Housing Benefit would help us out a huge amount, our wages aren't exactly anything to shout about. When we first applied for it I believe the system said we could be entitled to around £500 a month, not sure how accurate this is though.

I've spoken to the local housing office and they say without proof of my mother renting the property out in the past, they put it down as a contrived tenancy which it clearly isn't.

Can anyone offer any advice?

It's just annoying to know that if we rented a property next door we'd be given help but because we rent the property off my mother we get nothing. When what difference is there, the rent in either case would end up going towards the mortgage for the property.

Oldernotwiser

Will they accept you mother's tax returns showing that she has declared this income and paid tax on it|?

RazWaz

You can't claim Housing Benefit if renting from a close relative, even if the agreements are all legit.

Sam____2

RazWaz wrote: »

You can't claim Housing Benefit if renting from a close relative, even if the agreements are all legit.

yes you can as long as it's not deemed contrived

Jam0r

Oldernotwiser wrote: »

Will they accept you mother's tax returns showing that she has declared this income and paid tax on it|?

They only mentioned a tenancy agreement for the period of time my mum's friend was there along with bank statements to show that the rent was coming in.

Which she hasn't got, bank statements are fine, she can provide those, just not an agreement. She did however get Landlord action involved towards the end as the friend started acting up, ripping up the garden, knocking down doors, etc, etc..

RazWaz wrote: »

You can't claim Housing Benefit if renting from a close relative, even if the agreements are all legit.

It's stupid rule really, I can see why it's there but if anyone came round to see us they'd realise that we're renting it, she's not living there, she hasn't lived there since and we're paying the rent every month as the agreement states.

RazWaz

Sam___ wrote: »

yes you can as long as it's not deemed contrived

Hmm, like this situation? Sounds to me like they are living in the house in order to pay off their mothers mortgage.

I'm not trying to insult the OP, I'm just saying it thats how it looks to me (though I think it's a stupid rule myself), and thats what it will look like on the housing benefit claim.

Sam____2

The question is though if the mother wasn't renting to them would she be renting to someone else? as she was renting it out before they moved in then the answer would surely be yes...

Jam0r

But surely if we we're renting someone else's property out, our rent would be paying for their mortgage so what's the difference? At the end of the day our rental payments still don't even cover the total cost of her mortgage a month.

She can't afford to live there, she would rent it out again. She can't sell it either as her mortgage is more than the property costs with the current market.

Sam____2

The thing is though OP, if your working full time and your partner works part time, it's doubtfull you's be entitled to LHA

DX2

Very much doubt you would get HB, what with your full time employment, your girlfriend part time work and all the child tax and working tax benefits.

RazWaz

Jam0r wrote: »

But surely if we we're renting someone else's property out, our rent would be paying for their mortgage so what's the difference? At the end of the day our rental payments still don't even cover the total cost of her mortgage a month.

She can't afford to live there, she would rent it out again. She can't sell it either as her mortgage is more than the property costs with the current market.

And this is your first mistake. Never assume the benefits system is subject to simple logic, it's not. It will make no sense at all and confuse the hell out of you. Realising this fact now will save you many many headaches.