Renting a house from parents and housing benefit

Ygritte

I'm currently in social housing in London. I am very unwell and very unhappy.

My parents have a small cottage in Cornwall that they have been planning on retiring in but my dad has spoken with me about the possibility of them getting somewhere else nearby and letting the cottage to me. A new start sounds amazing but I don't know how the housing benefit would work out? They aren't rich so couldn't afford to just give it to me for nothing. I would be giving up a two bed house in london so that would be helpful for my council.

Any advice would be great x

marliepanda

Its unlikely. Not impossible, but unlikely.

Have they ever rented the property before? If not, and you will be the first person to rent it, its unlikely you'll get housing benefit.

Will they be charging you the market rate for the cottage? If for example the typical rent for that cottage is £600, but the HB max is £400 and they only charge £400, it will not be considered a commercial agreement.

Will they evict you if you did not pay rent?

Ygritte

No they've never been landlords before and although they wouldn't evict me per se, they definitely couldn't afford to let me stay there for free so I would have to move on somehow.

It's very confusing!

tomtontom

Where are they going to live if you live there, would it not be possible to live together until you're back on your feet?

marliepanda

Dawniedawn wrote: »

No they've never been landlords before and although they wouldn't evict me per se, they definitely couldn't afford to let me stay there for free so I would have to move on somehow.

It's very confusing!

So how have they been maintaining both the cottage and their current home, if they cannot afford to do that once they buy this new place?

The way the DWP will see it will be that your parents now need money from this cottage I assume to pay for a new mortgage or additional expenses for their new place, instead of using the cottage which was the original plan, so using Housing Benefit to fund their retirement which until now they had sorted themselves.

The fact the cottage has never been rented out before points to them only doing it as you are family, rather than an actual business, so it is unlikely you will be awarded housing benefit for this property.

bloolagoon

Dawniedawn wrote: »

No they've never been landlords before and although they wouldn't evict me per se, they definitely couldn't afford to let me stay there for free so I would have to move on somehow.

It's very confusing!

They would look at whether the tenancy was commercial and not contrived.

The easiest way to look at this (though it's not that straightforward) is to answer if they would treat you like joe blogs.

If they treat you and joe blogs the same you stand a chance of convincing the council it's not contrived, if they treat you differently, say not taking a deposit, not using a letting agent, lower rent etc then it's contrived.

In short they need to be a business, treat it like a business with you as a tenant - not their daughter.

One question would be why rent it now? If you weren't the tenant would they be landlords.

Ygritte

tomtontom wrote: »

Where are they going to live if you live there, would it not be possible to live together until you're back on your feet?

They don't live there full time yet, it was going to be where they retire to but my dad's idea was that they sell up here, get somewhere else close by to the cottage and let the cottage to me so I can be close and they can cover the costs.

It's not clear when I'll be back on my feet, so to speak. I'm 36 and there isn't enough room for us all to live together and to be honest I don't think it would be good for anyone to be all on top of each other like that.

Honestly not trying to con anyone. I already have a council house. Homeswap is a possibility but extremely unlikely London>Cornwall

marliepanda

Dawniedawn wrote: »

They don't live there full time yet, it was going to be where they retire to but my dad's idea was that they sell up here, get somewhere else close by to the cottage and let the cottage to me so I can be close and they can cover the costs.

l

But they can't cover the costs, according to your OP.

Ygritte

marliepanda wrote: »

But they can't cover the costs, according to your OP.

Using the housing benefit I meant. Sorry hard to be clear sometimes!

Yes they are maintaining two homes at the moment but they are struggling with that and need to make or break soon.

Option 1: sell up here, move to their cottage and using money from sale of London home to live on.
Option 2: sell Cornish cottage. Stay here.
Option 3: sell London home, buy another Cornish home, let original Cornish cottage to me, live off rent they get from me/council.

tomtontom

I can't see this being accepted as a commercial tenancy. The agreement would be centred around you being their daughter - rent at an affordable level, an unwillingness to evict if you could not pay, property not let/ marketed to other tenants etc. I hope you find a way to make the move though, it would no doubt be good for you health wise.

marliepanda

Dawniedawn wrote: »

Option 1: sell up here, move to their cottage and using money from sale of London home to live on.
Option 2: sell Cornish cottage. Stay here.
Option 3: sell London home, buy another Cornish home, let original Cornish cottage to me, live off rent they get from me/council.

And therein lies your problem. Housing Benefit is to pay your rent, its not intended to be your parents pocket money, so they end up with 2 houses instead of one.

Can they afford to maintain two properties? What if the boiler blew in your property? Or the roof collapsed?

Its not a commercial agreement so in my opinion you would not be awarded housing benefit.