BTL for girlfriend on LHA?

Cautious_Optimist

Would be grateful for some advice:


My current girlfriend is very unhappy in her present accommodation and would like to move.
GF has a young child, from her ex-husband and that is all official with custody and maintenance agreed etc.


I have never lived with my GF. We sometimes stay over with each other. All our finances are separate (eg bank accounts etc).
My GF currently claims benefits.


If I bought a house near to my current house, could I let it to my GF, with her claiming LHA to pay me as the LL?


I could probably raise about 30pc deposit for the BTL. Would any lenders agree to an LHA tenant on a 70pc LTV?
If not, my brother may join me in the purchase and together we could raise about 80pc deposit.


At a real push, we may be able to raise enough to purchase a house outright with cash (if another member of my family wanted to join in).


My main question is; would the council permit my GF to claim LHA, or would they class me as her ''partner''?


My understanding of the word ''partner'' in this sense, is a GF who lives with me, or has done so in the past.


I have searched online and the only exclusions to LHA payment seem to be:
''partner''
''ex-partner''
Father of GF's child (not me - official)
Family


Hopefully, if my GF moved closer to me, my mother could assist with childcare and my GF progress into work / college.


I know some people will argue that she is now my GF, so I should take her in to my own house, but at the moment I do not have much space. Plus, if we split up, that could lead to even more disruption to her and her child.

nodiscount

Personally I think you're just trying to screw the taxpayer.

Look up 'contrived tenancy'

Pixie5740

A general rule of thumb for BTL mortgages is that the rent has to be 125% or the mortgage repayments or more. Can you buy property in your budget where this condition will be met with whatever cap on LHA your GF could claim or would there need to be a rent top up?

Are you fully prepared for all the resonsibilities that come with being a LL. The one about giving notice before accessing the property for example Would you be prepared to evict her if she went into rent arrears or broke the terms of the tenancy agreement? Paying income tax on your rental income..?

The local council might scrutinise the situation and if they deem it to be a contrived tenancy, for example if they suspect that you wouldn't evict her for rent arrears, she won't get LHA for your property.

BigAunty

Yes, it is possible for a tenant to receive Housing Benefit when their landlord is closely related so long as the landlord doesn't live in the same property and the council do not believe it is a contrived tenancy.

Google 'contrived tenancy' to understand what the council look for in order to determine whether or not it has been set up to exploit the housing benefit system.

For example, they will expect a tenancy agreement (so that it operates on a commercial basis) and they will not accept an arrangement where the tenant claims HB when they are not working but doesn't pay rent when they are in employment.

http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/what_is_housing_benefit/housing_benefit_if_renting_from_a_family_member

nids

nodiscount wrote: »

Personally I think you're just trying to screw the taxpayer.

This. Exactly this.

SuzieSue

Cautious_Optimist wrote: »

Plus, if we split up, that could lead to even more disruption to her and her child.

If you split up how will you feel about being her landlord?

Before you do it, you should ask the Local Authority if they will allow it. They might say yes if they don't think it is contrived, you won't know until you ask.

Cautious_Optimist

nodiscount wrote: »

trying to screw the taxpayer.

Is her current LL not doing just that?
What would you do in my situation?


My understanding was that 'Contrived Tenancy' is only applied in situations where the LL is either the ''partner'' or a family member of the tenant.

Cautious_Optimist

BigAunty wrote: »

Yes, it is possible for a tenant to receive Housing Benefit when their landlord is closely related

This girl is not related to me.
What would be the situation were she my friend, but we were not ''dating''?

Cautious_Optimist

nids wrote: »

This. Exactly this.

Is her current LL not doing just that?
What would you do in my situation?


My understanding was that 'Contrived Tenancy' is only applied in situations where the LL is either the ''partner'' or a family member of the tenant.

Dan-Dan

You popping round for tea and scrumpets and a quick roll in the hay does muddy the waters

Cautious_Optimist

SuzieSue wrote: »

If you split up how will you feel about being her landlord?

I would still consider her an excellent tenant (clean, tidy, reliable) and I would hope to continue the arrangement.


I have been out with girls who I would never let a house to!