Renting a house from parents and housing benefit

bloolagoon

tomtontom wrote: »

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.

If it was my daughter I'd use a letting agent and rent it for 6 months AST to tenants then move daughter in at end of AST using the letting agent even for daughter. That way it's 6 mos down the line a bit less money as LA fees but unlikely to get the same questions. Just my personal thoughts though and I'm no expert but it would be line of thinking.

When the daughters AST is due for renewal then drop the LA.

When_the_going_gets_tough

Only the local council can answer this really. I think the best thing would be for your parents to look into the legal requirements of being a landlord and get some help from a local letting agent - for which they will have to pay in drawing up the tenancy and setting the rent at an acceptable level. Then you would need to approach the local housing benefit team and see what they say. You might need to keep on your current property until a final decision is made. I think it's worth a try. Presumably you are already getting HB in London so the situation is not that different.

Ygritte

marliepanda wrote: »

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.

They would be living off of the rent as opposed to the money from the sale of one of the properties. Is that not why landlords rent places out? To make money to live off of?

I think I may be coming across wrong here. My parents aren't trying to wangle a way to make an easy buck, they are trying to help their daughter and for them to be able to survive.
Boilers breaking down etc I should imagine would get covered by landlord insurance I suspect. I don't claim to know all the ins and outs though. This has literally just arisen from one heart to heart conversation with my dad.

marliepanda

Dawniedawn wrote: »

They would be living off of the rent as opposed to the money from the sale of one of the properties. Is that not why landlords rent places out? To make money to live off of?

I think I may be coming across wrong here. My parents aren't trying to wangle a way to make an easy buck, they are trying to help their daughter and for them to be able to survive.
Boilers breaking down etc I should imagine would get covered by landlord insurance I suspect. I don't claim to know all the ins and outs though. This has literally just arisen from one heart to heart conversation with my dad.

That is why landlords rent out properties but thats a business. They do it to make money, not to help people out. Its different. Otherwise everyone would just buy a property, let it to their children on Housing Benefit, let that pay the mortgage and end up with two properties (which will ultimately benefit you, when your parents pass away...)

Using money from the sale of their house is their own money, not the tax payers, and they will have one house. Your way the taxpayer pays for their second mortgage, and they end up with two asset properties.

If the boiler needed replacing landlord insurance doesn't cover that, the same way house insurance doesn't cover new boilers in houses. Its for fires, floods, break ins etc.

Ygritte

marliepanda wrote: »

That is why landlords rent out properties but thats a business. They do it to make money, not to help people out. Its different. Otherwise everyone would just buy a property, let it to their children on Housing Benefit, let that pay the mortgage and end up with two properties (which will ultimately benefit you, when your parents pass away...)

Using money from the sale of their house is their own money, not the tax payers, and they will have one house. Your way the taxpayer pays for their second mortgage, and they end up with two asset properties.

If the boiler needed replacing landlord insurance doesn't cover that, the same way house insurance doesn't cover new boilers in houses. Its for fires, floods, break ins etc.

It doesn't have a mortgage. It's literally a tiny one bed mud hut (mundic) that they were able to buy outright for 60k with a lumpsum from my dads police pension. They've also paid off their home here so no mortgages.
But I guess that probably doesn't help anyone's view of it as it sounds like they are rich. They aren't. All their retirement money is now tied up in property so they need to make a move soon. Thankfully the Cornish place doesn't cost much to run right now as it's empty most of the time.

I dunno. Lots to think about and it sounds like it will just be a bit of a witch hunt that I don't want to drag them through anyway.

tomtontom

bloolagoon wrote: »

If it was my daughter I'd use a letting agent and rent it for 6 months AST to tenants then move daughter in at end of AST using the letting agent even for daughter. That way it's 6 mos down the line a bit less money as LA fees but unlikely to get the same questions. Just my personal thoughts though and I'm no expert but it would be line of thinking.

When the daughters AST is due for renewal then drop the LA.

Certainly a valid idea, but it comes with the implications of having real tenants, including the possibility that they won't want to leave

shop-to-drop

How many rooms in the cottage. Could you have a lodger or do B&B? Would that raise enough money to help parents enough with costs. They'd no longer have council tax and other bills to pay either. Maybe you could even claim tax credits if the B&B business was legitimate.

marliepanda

tomtontom wrote: »

Certainly a valid idea, but it comes with the implications of having real tenants, including the possibility that they won't want to leave

Also morally I find it dodgy. Chances are its going to be rented out cheap, if the rent will be cheap for daughter, so what if you have people who are super happy to get a nice cheap property only to be turfed out in 6 months as it was basically a ruse to make it look like a legit rental.

Sorry I dont agree with using people to help line your own pockets. I also assume that the HB office are not daft and will see through a 6 month 'its business, honest' rental.

bloolagoon

tomtontom wrote: »

Certainly a valid idea, but it comes with the implications of having real tenants, including the possibility that they won't want to leave

That's a LL and responsibility though, including many other things that could go wrong - but it's then easier to move OP in. I can't see their council accepting as it stands so it's one way forward.

shop-to-drop

I see it's a one bed. I think they should sell it or rent it out legitimately. It is sickening that Londoners buy up these properties even more so when they leave them empty when they should be a home for a local person.