Advice on 2nd property please?

Panimu

My wife and I currently have a mortgaged house and intend to buy a second property to set her son (my step-son) up in. It's a small flat with a £50,000 asking price.

I don't anticipate trouble getting a mortgage for the amount I'll need but I'm unsure which I should get. The son will be claiming whatever housing benefit/other benefits he can and be making a contribution to rent. I don't really expect to get full value.

Anyway so do I just buy it as a 2nd property?
Or do I need to buy it using a BTL mortgage?

Is there any advantage to doing it one way or the other?
Is there any legal requirement for me to do it one way or the other?

thank you for reading

Mojisola

Panimu wrote: »

My wife and I currently have a mortgaged house and intend to buy a second property to set her son (my step-son) up in.

The son will be claiming whatever housing benefit/other benefits he can and be making a contribution to rent.

It's unlikely that he will be able to claim HB in such a situation.

Panimu

Mojisola wrote: »

It's unlikely that he will be able to claim HB in such a situation.

What makes you think that?

MankyVegSoup

I'm pretty sure our standard buy to let mortgage doesn't allow you to rent to family and expects you to let at market rate using a formal tenancy agreement.

dimbo61

Your step son could get a job.
You could help with a deposit which you give as a GIFT and he could pay the mortgage every month.
No need for the Tax payer to help you build a BTL empire

Bogof_Babe

Panimu wrote: »

My wife and I currently have a mortgaged house and intend to buy a second property to set her son (my step-son) up in. It's a small flat with a £50,000 asking price.

I don't anticipate trouble getting a mortgage for the amount I'll need but I'm unsure which I should get. The son will be claiming whatever housing benefit/other benefits he can and be making a contribution to rent. I don't really expect to get full value.

Anyway so do I just buy it as a 2nd property?
Or do I need to buy it using a BTL mortgage?

Is there any advantage to doing it one way or the other?
Is there any legal requirement for me to do it one way or the other?

thank you for reading

Google "contrived tenancy".

Panimu

dimbo61 wrote: »

Your step son could get a job.

He's in college.

dimbo61

Well if you get him to open a Help to buy ISA or a LISA and put some money into the account each month.
It will help when he does get a job

Thrugelmir

Panimu wrote: »

He's in college.

Hence the earlier reference to the tenancy being "contrived".

Bogof_Babe

I don't think students can get housing benefit can they? Aren't they meant to take out student finance loans?