But to let for son to live in

16confused

Hello,


I am looking for some advice on what to do. I've read through some of the forums but still not sure what my options are. Any suggestions welcome. Hoping for some inspiration!


My son has savings but is currently unemployed. In the area that we live permanent jobs are difficult to find and so he has a had a number of rolling 6/12 month contracts. I expect he will find work again soon from one of the interviews he has. However, these may well be 6/12 month contracts.


He has a deposit saved up that would cover a 15-20% deposit on a flat/house. I also have funds that I could lend/give him to help buy somewhere that could push his mortgage up to a 30%+ LTV.


The budget for the property is £120k - £150k.


So there deposit is taken care of his difficulty is getting a mortgage. He's approached lenders and they have said he'd need to have a permanent job. He could be waiting years for one of these to come up unfortunately.


We have come up with two possible options


1. I take his deposit and my savings and then use this for a deposit on a buy to let in my name. The cash each month will come into my account and will be taken by the lender. They would never know that I was letting it to my son.


Clearly if they did the checks and saw that I was receiving money from my son this would likely not be in the spirit of things and may be against their rules but how would they know?


This may not be possible? Also, the downside is that since I already own by house this would count as a second property and so I would be subject the 3% surcharge as there is no way I could complete before 1st April 2016.




2. I lend/give the funds to my son who buys a property on a buy to let.
My understanding is that as a landlord he would need to show that the rent covers 125-130% of the mortgage cost. We have had a good look locally and know what the local rental market is and think that if we fixed the interest rate for 2-3 years we could demonstrate that the rent would cover the repayments by the required percentage.


The difficult bit is that my son would then rent this to himself. The lender would have a big deposit and security over the house. Despite this I'm sure they wouldn't want him letting to himself.


When I have rented a property out the rent came into my account from the tenants and the mortgage went out of the same account to the lender. There was no relationship between the two.


If I were to buy on a but to let and then not rent the property out at all the cash would come from my savings and not from a tenant and so what would the difference be.




This is all pretty difficult but without a permanent job what other options are?
Is there anyway I could guarantee my son's mortgage payments?
He won't get a mortgage without a permanent job so what are the available options?


He's desperate to get tis own place and not be living at home but after many years saving for a deposit he doesn't want to go and spend it renting a place out.


Can anyone help?


Thanks in advance

PasturesNew

Apart from lenders (as a sweeping statement) not letting people rent to family, or borrowers to live in their BTL, where will he find the money from to pay you the rent out of his £70/week dole?

Bluebirdman_of_Alcathays

Much easier than the contrived arrangements suggested is surely to... Find a full time job?

Soworried

Why doesn't he just move to an area where he can get full time work?

That way he won't need to commit housing benefit fraud and risk a jail term.

theartfullodger

16confused wrote: »

But to let for son ..............................

Male prostitution is really not to be encouraged. And certainly not to be mentioned on a family-forum.

Can't he get a normal (- normal...!), boring, ordinary job?? Stacking shelves at Tesco or flipping burgers at Maccie-D's will start the process, give him some self respect and hopefully develop into to something better ... Even if it doesn't develop, honest working for a living is better than what you've outlined.

Never rent to friends & family: Only rent to those you are prepared to evict in the full glare of local TV & papers & family rows at Christmas...

With that much savings he won't get HB/LHA or only get reduced HB/LHA
https://www.citizensadvice.org.uk/benefits/help-if-on-a-low-income/help-with-your-rent-housing-benefit/#h-who-can-get-housing-benefit

If you or your partner have more than £16,000 in capital, you will not get any Housing Benefit, unless you are getting the guarantee credit part of Pension Credit.

If you or your partner have capital of over £6,000, you will be assumed to have some income from that capital....

Mossfarr

Why go for a buy to let mortgage?
You can apply for a second residential mortgage in joint names with your son. He lives in it and pays the mortgage & other bills. He builds up a credit history - but you remain responsible for the mortgage payments if he can't pay.
You have to be able to demonstrate that you can afford to pay the second mortgage as well as your own housing costs.
At some point in the future when your son is in a stronger financial position he can remortgage & pay you back what you've spent or you can transfer the house completely to him.
(I have done this with my daughter so it is a perfectly viable option).
Unfortunately you will be liable to pay the additional 3% as it will be classed a a second home for you.

xylophone

Is there really nothing available on a permanent basis?

Dan83

I'm no expert and have no experience in this at all, so my idea could be pointless, but.

Could you get a BTL mortgage, let an estate agent sort the rental side out, then your son rents it from the estate agent?

Then he is renting it from the estate agent and not you.

[Deleted User]

I don't think you will find many people on here who will encourage you to commit fraud. You clearly know its fraud, but don't seem to think it matters unless you have a chance of being found out. Your son just has to mention the arrangement to one 'friend' who decides he isn't a friend (who possesses a phone) and the game is up. You also don't seem to get that the 'rules' are set up for good reason.., to stop people making dodgy arrangements with a risk of defaulting on the mortgage.

I suspect you should have researched or read the relevant posts on this board before posting.

marliepanda

Dan83 wrote: »

I'm no expert and have no experience in this at all, so my idea could be pointless, but.

Could you get a BTL mortgage, let an estate agent sort the rental side out, then your son rents it from the estate agent?

Then he is renting it from the estate agent and not you.

That's not how it works. The agent is just that, an agent, and the son would still be renting from his father.

He can't rent the house to himself, that's ridiculous and I can't believe the thought even crossed your mind.

elsien

Is he going to take himself to court to evict himself when he can't pay the rent?