Friend Paying Mortgage

Dooley92

Hi. Just wondering if you are able to do this. I am looking at buying a house and getting a mortgage. My friend will be moving in with me and i was going to ask him to pay the mortgage/most of it as his rent. Would i need to get a mortgage as a buy to let or can i get a first time buyers. Also would i be able to put my income higher as he would be paying me.

Thanks

silvercar

If you are living in the property with your friend, then your friend is just a lodger who has a lot less rights than someone who lives without their landlord sharing the property.

As such most lenders will not be interested and won't require you get their agreement first.

So you would still get a residential mortgage as you will be resident. Most lenders won't take into account lodger's rent payments.

You should be declaring the rental income, but google the hmrc rent-a-room scheme for details of exemptions.

To keep things "clean" your lodger should pay you the agreed rent and you should pay your mortgage. The last thing you need is a friend claiming a share of your property on the grounds that they have been the only one to pay the mortgage.

G_M

Your friend pays you rent.

You pay the mortgage.

as it's your main residence & you live there, a normal residential mortgage is fine.

As for tax on the rent you receive, see the rent a room scheme.

Make sure you have a basic lodger agreement, clear house rules, and a short notice period.

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

theartfullodger

As G_M says re rent see rent-a-room scheme: If over the limit (currently £4250/pa, about £81:50/wk..) you need to declare ALL rent income to tax man: Yes, even if being used to pay mortgage.

But if you are in receipt of any benefits you should inform the authorities of this increase income.