Pensioner Housing Benifit When renting from child

JSH333

Hi all,

My Mother currently leaves with me (a property I own) and is just turning pension age. What we would like to do, is for me to purchase a buy to let flat for her which she can then rent from me and claim housing benefit.

I was planning to charge her the same as the local housing allowance figure for rent (about £450 pm for one bedroom in my area). Therefore her pension and pension credit wouldn't be eaten into by rent. I have a couple of questions regarding this.

Firstly, is there any issue with her clamming benefits given she's my mother. As far as I'm aware its not an issue if we don't live together.

Secondly, is there any issue me charging her a lower rate when compared to the average in the area? I understand there may be tax implications? I'm assuming she will get the maximum LHA if the rent is equal to or greater than this figure?

Lastly, is there anything I haven't considered? I'm happy the rent will be over 125% of the mortgage so I cant see that being a problem.

Its an area that doesn't seem to be covered much, there's a fair few examples the other way round, of a child renting from a parent, but not like my situation.

Thanks in advance

Gingernutty

Try here.

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

http://www.housingandsupport.org.uk/renting-accommodation-to-relatives

specialboy

Would you be prepared to evict your mum if she can't meet the rent?

JSH333

specialboy wrote: »

Would you be prepared to evict your mum if she can't meet the rent?

in this scenario, id have her move back in with me so I can have another tennant. So yes is the answer.

tom9980

You would need a regulated BTL mortgage as well to rent to family these are not very common, add in the fact it is tricky to get housing benefit when renting from family and you are exposing yourself to a lot of risk.

Pixie5740

1) You'll need a regulated BTL

2) This sounds like a contrived tenancy so your mother wouldn't be eligible for housing benefit.

Is there any reason your mother can't continue living with you or rent a property from a LL she isn't related to?

Cheeky_Monkey

Another vote for Contrived Tenancy!

terryw

http://www.chroniclelive.co.uk/news/north-east-news/youre-just-jealous-1535992

Here is a link to a lottery winner who receives HB in respect of the houses that were bought to for the children to live in.

Pixie5740

terryw wrote: »

http://www.chroniclelive.co.uk/news/north-east-news/youre-just-jealous-1535992

Here is a link to a lottery winner who receives HB in respect of the houses that were bought to for the children to live in.

I'm surprised that North Tynside Council don't consider those to be contrived tenancies.

With parents like that it's no wonder the children are !!!!less wonders.

JSH333

Pixie5740 wrote: »

1) You'll need a regulated BTL

2) This sounds like a contrived tenancy so your mother wouldn't be eligible for housing benefit.

Is there any reason your mother can't continue living with you or rent a property from a LL she isn't related to?

1. Ive worked all my calculations on it being a BTL mortgage anyway so thats fine.

2. This is the area I was wondering, what constitutes a contrived tenancy?

3. the simple reason is I want my own space. she could rent from a non-relative but given her income she would only be able to afford a dive as she has no investments or private pension, she gets state pension and pension credit only.

I can't afford a second mortgage without the rent as income either. So not quite the millionaires on the link from terryw.

Ultimately, I'm accepting a loss of potential profit in the arrangement for the knowledge my mum's happy in where she lives. I've wanted to BTL for some time and having my mum as a tennant seems like a good choice given I trust she wont wreck the place etc, plus I know my mum's ok and not going to be evicted if the LL decides to sell if she were renting anywhere else

Grumpelstiltskin

Ok so your mother would need housing benefit?


So you would need the money your mother pays as rent to cover the mortgage?


So eventually you will have a property that has been fully paid for by the taxpayer?


Nice one.


Sorry if I have got this wrong but it looks like this to me.