advice and help needed regarding partner moving in

babydust2010

its s long story but here it goes....
my partmer claims benefits he claims ESA awaiting on an appeal as he has a back problem and is unable to work (awaiting an operation) and owns his own home witch he still has a morgage on but its on interest only.....but he wants to rent it to his son and his daughter in law and her 5 yr old.....
he wants to move in with me i currently live in a council house i claim benefits i claim income support as lone parent with Child tax credits housing benefit and council tax benefit also......i have 2 children.......
can he legally move in with me and claim while his son pays the morgage in theory hes going to rent the house
does anyone have any advice as to how we go about the move etc? and if we have to draw up a legal document to say his son is renting.....as i know dwp class a home as an asset and we dont no what to do or how to go about it can anyone help?thanks

BigAunty

Your partner needs to see if the mortgage company will even let him rent it out - he needs permission and they may not necessarily grant it if there isn't much equity, etc.

Your partner should also understand that his son ever needs to claim housing benefit (for example, loses his job) the claim will be under greater scrutiny because they are related to see if the council believe it is a contrived tenancy. Therefore he needs to research how to formalise the tenancy in order for a future benefit claim not to be rejected on those grounds.

Does your partner understand that up to 28% of the property value increase during the tenancy could be lost to capital gains tax if he decides to sell it in future? By housing his son, it could cost him dearly in tax.

Does he understand he has significant responsibilities as a landlord, including paying for all repairs? annual gas safety check?

Has he thought what might happen if their family relationship breaks down or his son stops paying the rent or his relationship with you breaksdown and he has to evict them?

How much equity is in the property? This link explains how the capital in it is calculated and how it could affect entitlement to housing benefit in a rental property when he owns another property but doesn't occupy it.

http://www.dwp.gov.uk/publications/specialist-guides/technical-guidance/rr2-a-guide-to-housing-benefit/working-it-out/income-and-capital/

To calculate how his moving in will affect your benefits, enter the proposed scenario in the Turn2us online benefit calculator.

Other people can tell you how the income from the rental property may or may not affect his means tested benefits.

Also, it is a really, really bad idea to have an interest only mortgage for more than a short-term period. The housing board on MSE sees many posts from people approaching the end of their mortgage term on IO mortgages who have no hope of redeeming the capital and therefore face a rush to sell it in a flat market before it is repossessed - lenders do not extend mortgage terms when there is no realistic prospect of the borrower being able to pay it off through employment.

Perhaps he should just sell his property if he cannot afford to live in it now and has limited capacity for employment and returning to a repayment mortgage soon.?

HB58

To follow on from Big Aunty's reply - your partner needs to understand that it can take months to evict a tenant, if the need arose.

Is your partner on contriutary or income-related ESA? Contributary does not take income or savings into account for at least the first 365 days.