Council tax/Renting question

Former_MSE_Megan

Hi,

I'm posting this on behalf of a user that wishes to remain anonymous.

Hello can anyone advise, I am exhausted trying to get an answer

I recieved HB CT for the housing association property. I also own a property which is up for sale. ( which I have to sell in 26 weeks and of which i also have to pay council tax after 12 weeks from the date in which i first recieved CT on the housing association property) i am literally giving the house away and accruing debt each month as the mortgage is not being paid - I get PIP and ESA income related.

Can I rent the property out at a loss - the mortgage payments are £800 per month with the estate agent saying he could rent it at below the price for £650-700. ( mortgage high due to arrears ... Would I loose my esa ? Housing benefit and council tax - i have provided all paperwork in which I am trying to sell it . What are the rules for renting, can I rent if monies go straight to mortgage company? No profit is made on the rent.

Help please and thanks

Thank you.

pmlindyloo

Have already answered this. OP tagged onto someone else's thread.

Answer:

First of all the 26 weeks of disregard for selling your property can be extended so do not worry about that. You just need to show that it is up for sale and at a sensible price. Have you checked with your local council about what council tax you should be paying on the empty property?

Renting out the property instead can certainly be done but I personally would not recommend it because:

1. You would still be accruing mortgage arrears as the rent wouldn't cover the payments - your lender could get nasty and start trying to recover the arrears through court/repossession etc etc

2. if you rented the property out the equity in your property (current market value less any outstanding mortgage) would be counted as capital (savings) as regards any means tested benefits and the rent would be counted as income. In all probability you would lose all your benefits except for the PIP.

3. If you rented it out you would become a landlord with all the associated responsibilities.

AdrianC

pmlindyloo wrote: »

3. If you rented it out you would become a landlord with all the associated responsibilities.

This cannot be understated...

So renting it leaves a £100-150/mo shortfall on the mortgage. How will the OP cover that? Will their lender give them consent to let? What happens if there's expenditure needed on the property, or if the tenant decides not to bother paying rent?

Sorry, renting it is TOO risky.

It seems that the only real option is to sell it asap. Auction, with a lowish reserve but one that won't leave too much outstanding debt? If not, and if the EA can't get a buyer through the usual channels, then repossession might be the least-worst route out of the mess.

agrinnall

MSE_Megan wrote: »

Hi,

I'm posting this on behalf of a user that wishes to remain anonymous.

How bizarre, everybody is anonymous to a greater or lesser extent on here, so I can't see why the person couldn't ask their own question.

pmlindyloo

agrinnall wrote: »

How bizarre, everybody is anonymous to a greater or lesser extent on here, so I can't see why the person couldn't ask their own question.

I think it was more to do with the OP not knowing how to start their own thread.

Janetta

Sorry still dont know how to start a thread ... Not IT savvy

Janetta

Sorry no IT skills

AdrianC

Janetta wrote: »

Sorry still dont know how to start a thread ... Not IT savvy

Go to the forum index - the list of threads.
Click on the button that says "New Thread".

Janetta

Hello

What are your thoughts on this ??

Hello,
Thank for replying,
Sorry to the persons whose thread this is ... Well matters have moved on a company have asked if they can lease the house for sheltered accommodation or offenders at risk etc .. I have set out to them what I get in benefits and await their proposal as to what they will pay each month for rental / lease of the property.. ( large house 5 bed / ensuites etc ) with a housing association if its more than benefits i would consider it .. What advice do give ?

jamie11

Janetta wrote: »

Hello

What are your thoughts on this ??

Hello,
Thank for replying,
Sorry to the persons whose thread this is ... Well matters have moved on a company have asked if they can lease the house for sheltered accommodation or offenders at risk etc .. I have set out to them what I get in benefits and await their proposal as to what they will pay each month for rental / lease of the property.. ( large house 5 bed / ensuites etc ) with a housing association if its more than benefits i would consider it .. What advice do give ?

Don't do it!
It could not be a AST if it's let to a company, you would have no control over who is in your property.

Several other reasons as well, these types of contracts usually end in tears (yours).

I would expect you to have benefits withdrawn if you are taking rent for your property as well.

jjlandlord

For such request, I would check what is the market rent then double it and make that my asking price.

You would also need a belt-and-braces contract regarding damages, etc. Best to get a solicitor to deal with that.

Lastly, you should check with your lender (starting with your mortgage T&Cs) if that would be acceptable.