Renting a house to family member on benefits

alcur

Good evening guys,

I am looking to cash purchase a £100k house to rent out to my aunt who currently receives housing/CT benefit.

The rent for a house like this would be £400 pcm on the open market but I would want to charge it at a discount at about £200. I'm not particularly looking to profit but want her to be in a forever home. I am aware of the landlord implications. I'm aware I would need to declare the income.

Can you advise if she would be able to claim even though she is renting from a family member? All would be above board with a tenancy agreement in place etc but I would manage it myself.

Thanks in advance.

bris

Google, "Contrived tenancy" that's what your plan would be.

Doom_and_Gloom

From what you are saying it would be considered a contrived tenancy and so would not be legal for benefits.

HappyMJ

alcur wrote: »

Good evening guys,

I am looking to cash purchase a £100k house to rent out to my aunt who currently receives housing/CT benefit.

The rent for a house like this would be £400 pcm on the open market but I would want to charge it at a discount at about £200. I'm not particularly looking to profit but want her to be in a forever home. I am aware of the landlord implications. I'm aware I would need to declare the income.

Can you advise if she would be able to claim even though she is renting from a family member? All would be above board with a tenancy agreement in place etc but I would manage it myself.

Thanks in advance.

You can charge her £200 rent if you like but it's very unlikely she would get £400 a month in housing benefit. It's quite likely she would get nothing therefore she would have to use her pension to pay the rent.

alcur

Thanks guys. Not looking to break the law, so will have to weigh up other options.

HappyMJ

alcur wrote: »

Thanks guys. Not looking to break the law, so will have to weigh up other options.

Neither of you will be breaking any laws. You can buy a house for her to live in if you wish.

What other options were you thinking of? She's in a house already paid for by housing benefit.

If she needs to move and is finding it difficult finding a landlord then you could pay 6 months rent up front for her and she can use the housing benefit she gets to repay you.

sniggings

bris wrote: »

Google, "Contrived tenancy" that's what your plan would be.

No it isn't.

OP yes you can do what you plan...
http://scotland.shelter.org.uk/get_advice/advice_topics/paying_for_a_home/housing_benefit/housing_benefit_if_you_rent_from_a_family_member

mchale

alcur wrote: »

Thanks guys. Not looking to break the law, so will have to weigh up other options.

Yes you can do what you want, just charge her 10% below market rent & she will receive benefit ok, the LA may ask more questions about tenancy but as along as the property exist's & she lives there you will have no problems.

fed_up_and_stressed

alcur wrote: »

Good evening guys,

I am looking to cash purchase a £100k house to rent out to my aunt who currently receives housing/CT benefit.

The rent for a house like this would be £400 pcm on the open market but I would want to charge it at a discount at about £200. I'm not particularly looking to profit but want her to be in a forever home.

Can you advise if she would be able to claim even though she is renting from a family member? All would be above board with a tenancy agreement in place etc but I would manage it myself.
.

The fact this is to be her "forever home" is what makes this a contrived tenancy. Unless you were prepared to evict the tenant in the case of rent arrears I think you are going to have to make alternative arrangements rather than relying on taxpayer cash.

[Deleted User]

Frankly the council will be paying HB for something for the aunt to live in. Better less HB to a relative who is giving his aunt a tenancy agreement that presumably would be legally binding and does not wish to make a profit from the situation than a private LL who does. To me, that is worse and costs the country far more. Some councils even pay private LL's a premium to encourage them to take a tenant on HB lol. I struggle to understand that that situation is less wrong.

Kynthia

It's hard to say whether the council would consider this tenancy contrived. If you already owned a property and had let it to others before letting to your aunt you would be in a stronger position to convince them you are a legit landlord and not someone who would let your family member live there for free but get housing benefit from her if you can.