On HB renting from relative?

Troutwrestler

Hi

I know it's possible to rent from a relative as long as the tenancy is all above board ( I have done it myself recently) but I wanted to know there position on market rents?

My mum has a btl house 2 bedrooms, she usually lets it out for £450 a month, and has renting it out for the past 8 years. The current tenants have moved out and left it ina bit of a mess...decoratively and a few things that need updated.

My brother (who is 29 and on HB )has been served with a notice to quit his current property... My mum has said if he could rent out her house but as he only gets shared rent rate (£250 a month) he would need to claim HB anew top it up.

Will council not think as he can't afford full rent this is odd? I think he has no chance of getting the HB but council said they look at each case individually so can't say...not much use if he moves in and the say no,

Can anyone advise?

Thanks in advance

quidsy

As a single man with no dependants wont he be restricted from claiming more HB for a 2bed?

Troutwrestler

quidsy wrote: »

As a single man with no dependants wont he be restricted from claiming more HB for a 2bed?

That's what I said to my mum, he is entitled to £250 a month, her rent is £450... Although she said given state of house she would lower it slightly ( she would have to on open market anyway) and he said he is willing to top up the rest from his benefits

p00hsticks

I'm not quite sure what you're asking, but my understanding is that if he's only entitled to the shared rate that's all he'll get - if he wants to rent anywhere more expensive then it's up to him to find the difference somehow (perhaps get someone to share the rent with?)

If you're saying that your mum would be prepared to rent the property to him at under the going market rate then I suspect this would be seen by the council as not be appropriate for a housing benefit award, but other people on this board will hopefully know for sure....

Troutwrestler

Sorry, I'm not making much sense...up all night with a poorly 3 year old

She is wanting to slightly lower the rent due to house repairs and decoration...but my brother is willing to pay the shortfall as he wants to live in the property. I just thought council might say no as he can't get £400-450 a month...

Caz3121

If he has £307 per month JSA I would expect it to be difficult to pay the rent top up and have enough left for bills/food/travel so it is likely to be looked at very closely
Given that he has been given notice and your mums house needs work, could he move in temporarily rent free in return for doing the work required to get it ready for marketing then maybe by this time he will have found employment and can decide whether he can afford the rent. Whilst the property is worked on/not let, having him there would be win-win

Troutwrestler

He gets esa and dla and has some savings he would use to top up rent, plus he wants to get back into work..he's adamant he can afford it..but yes, my thinking is, they won't see it as legal tenancy if he's getting much less than rent?

quidsy

Can your mum not rent the 2nd beroom out as sharers. Would that affect his allowance.

Troutwrestler

quidsy wrote: »

Can your mum not rent the 2nd beroom out as sharers. Would that affect his allowance.

I have no idea. Don't know if he'd want to share. My brother has mental health problems, hence why he's been asked to leave his current house, he can't really manage on his own...mum wants him close and if he's in her house she can keep a better eye on him really...tbh..I don't know if anyone would want to share with him..he can be a bit difficult

pmlindyloo

Troutwrestler wrote: »

He gets esa and dla and has some savings he would use to top up rent, plus he wants to get back into work..he's adamant he can afford it..but yes, my thinking is, they won't see it as legal tenancy if he's getting much less than rent?

Which rate of DLA does he get?

If he receives the middle or higher rate care component of DLA then he would be entitled to the one bed rate.

http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/housing_benefit_if_you_are_under_35#exceptions_to_the_new_rules

As regards the award for HB when renting from a relative I think he would stand a very good chance of being awarded it.

Charging a commercial rent is only a part of it. To be refused HB it has to be shown as a contrived tenancy agreement, ie set up to claim benefits.

Since it has already been rented out before and your brother has mental health issues and he may be homeless if mum didn't rent to him and he has savings and he can afford to 'top up' himself then all this together may be seen as perfectly reasonable.

You could just go to the council and ask.

pmlindyloo

Also, is he aware that he can do permitted Work whilst on ESA without it affecting his ESA?

Have a look at this link which describes the criteria:

https://www.gov.uk/employment-support-allowance/eligibility