Renting Second Home to family members?

G_M

* the mortgage. The lender may/may not
- require BTL mortgage, or CTL
- permit letting to family under BTL
The solution is to borrow some cash via a new mortgage on the other property, and use it to pay off the existing mortgage

* Rent. Any amount, or none, can be charged. However
- if mortgaged via a BTL, the lender may require a minimum rent to cover repayments
- if benefits are claimed, DWP will require a 'market rent'
- rent is not just cash. If the occupiers contribute in kind (renovations, extensions, labour, 'linked' agreements etc) that would be a form of rent

* New landlords: advice, information & links

xylophone

the mortgage. The lender may/may not

As I understood it the OP owns his dwelling house outright and his second property with a small mortgage.

He has the option to mortgage his dwelling house, and use the cash raised to pay off the small mortgage on the second property which he would then own outright.

There would be nothing to prevent his allowing his parents to live rent free in a property he wholly owns?

He could choose to keep a room in that house for his use when he wishes?

He could choose to keep all bills in his name with his parents paying him two thirds to cover their share?

There would be nothing to prevent his parents making him cash presents for birthdays and Christmas if they so chose?

Just thoughts and questions - I have not extensively

researched on Google.

....:) - the OP could do the research/ take professional advice to find the solution that best suits him?

DigForVictory

If my parents needed a home, & I had one to give, I'd give it.
Not as I'm insanely generous, just as the whole minefield of land law, landlord palaver etc strike me as an area I would actively choose to avoid.
In the longer term, odds on I'd get some of it back anyway but even in the short term simpler an outright gift and done rather than start exotic dances with trusts etc and the landlord responsibilities.

I wish the OP all the very best, and a long happy healthy life for them all.

einsley

Hi, thanks for all the responses!

We are getting in touch with a tax advisor to try and sort everything out (other stuff going on as well) but I'm feeling really postitive after reading this!

(for the record, OP is a she, not a he...;) )

saajan_12

einsley wrote: »

Could the morgage be transferred to first home? (Currently owned outright)

marliepanda wrote: »

You can remortgage your home and pay that money towards the other house if you want. You cannot 'transfer' it, but thats a way to shift the funding.

G_M wrote: »

The solution is to borrow some cash via a new mortgage on the other property, and use it to pay off the existing mortgage

Can you port the mortgage from the 'second home' to the main residence? Ofcourse it would be up to the lender, but this is common when you buy a new property and port the mortgage from an old one you're selling - surely this is possible without the sale/purchase transactions?? Reasons could be

- avoid ERCs if within a fixed deal
- save some mortgage application fees (would still have to pay some legals, valuation though)
- possibly avoid re running affordability checks