Thinking of doing a buy to let

saver03

I have a diary on the MFW board and it was suggested that I pose a question on this board as you are all very knowledgable

In a nutshell I am thinking about buying a property and letting it out to my mum. 2 questions have been raised by other members:

1. Can I get a BTL mortgage if the tenant is my mum
2. Could my mum claim housing benefit if I was her landlord, well me and OH

My OH and I do believe that property is the way forward, in the longterm, but having a 2nd property does worry me as you never know what your tenant would be like, that's why my mum would be the perfect one.

Thrugelmir

Some lenders will treat this a dependent relative mortgage (i.e. 2nd residential not BTL). So as to comply with FSA regulations regarding the letting of property to related tenants.

dimbo61

Good luck on becoming mortgage Free
But the idea of buying a BTL which you then rent out to mum and the Tax payer pays for !!!!
many BTL lenders do not allow this
Where is your mum living now ?
The LHA housing benefits system is changing in soon and MUM may not qualify for a house on her own

saver03

My mum currently lives in private rented accommodation but since she has just been let go from work due to ill health she can no longer afford to live there so will be moving back to the town where I live. Not even sure if she qualifies for any benefits as she has always worked hard and has savings :mad:

My logic was that my mum has to rent somewhere so why not rent from us?

Myself, my mum and OH have paid tax all our working lives so we are not trying to deceive anyone or get something for nothing I just wondered if this would be an option?

Thrugelmir

What's your primary objective a successful profitable business or providing a home for your mother?

saver03

My main objective was to invest in our future but obviously I would like to help my mum out too.

I figured if my mum was going to pay rent to someone to help pay off their mortgage why can't it be us? :rotfl:

Wutang_2

saver03 wrote: »

I figured if my mum was going to pay rent to someone to help pay off their mortgage why can't it be us? :rotfl:

Whats so funny?

saver03

Wutang wrote: »

Whats so funny?

Maybe it should have been a as apposed to a :rotfl:

holly_hobby

BTLs are unregulated lending as essentially it is semi-commercial finance, if the property is to be occupied by a family member (by more than 40%), then under FSA regs this turns the lending in to regulated borrowing - which in turn discounts a fair few of the BTL lenders, whom simply don't want the associated regulatory responsbility.

As a regulated BTL, those lenders who will still consider, may choose to evaluate affordability as a 2nd mge (ie - its based on your income, and not rental income as seen with standard BTL criteria).

Turning to HB, this is not paid when the "landlord" is family.

Certainly pch a home for your mum to live in, but having DWP pay for the privilege isn't an option I'm afraid (unless of course your relationship is deliberately concealed from DWP).

Hope this helps

Holly

Thrugelmir

saver03 wrote: »

I figured if my mum was going to pay rent to someone to help pay off their mortgage why can't it be us? :rotfl:

Then don't forget to factor tax into the equation. Only the interest element of the repayment is tax deductible. So repayment of the mortgage isn't as straightforward as it may seem. Capital in effect is repaid from after tax profit.

saver03

I would like to thank everyone for their advice on this. :beer:

I am honestly not trying to get something for nothing or take advantage of the system I was just trying to figure out what our options would be.