Renting a family members property?

Hms124

Hi, any advise would be appreciated.
My partners mum lives on her own in a 3 bed house. Due to medical issues and the house just being to big for her to upkeep, she has decided to move in with her long term partner in his home. The plan was me and my partner are going to purchase the property from her as a concessionary purchase, as she wants to gift us 10% of the property as our deposit as his inheritance, after speaking to a mortgage advisor he’s advised us that we can borrow what we need to purchase the property (130k) After slogging for the past year we have managed to pay off our debt but still need to save money for our fees, which we hope to have by Christmas. She has said she wants to move out sooner and if we would want to rent the house from her until we have the fee money to purchase. Is this possible for us to do? Would this mean she needs to get a buy to let mortgage? Would she need to pay tax on the rent we pay her? And will us already living in the property go against us when we go for a consessionary purchase? she still has 30k left on her mortgage to pay and we are currently private renting (month to month contract) so can leave soon if this is possible. we are not in receipt of housing benefit. She only wants enough to cover the mortgage payments as rent, which is half of what we pay in rent currently where we are.

Or would we just be better to wait until we are ready to purchase in December and her just paying the mortgage on an empty property? This is new to us so any advice would be great, thanks.

G_M

Hms124 wrote: »

..... if we would want to rent the house from her until we have the fee money to purchase. Is this possible for us to do?

yes

Would this mean she needs to get a buy to let mortgage?

yes,or Consent To Let from her mortgage lender. But note most lenders do not allow letting to family

Would she need to pay tax on the rent we pay her?

yes of course- it's income

And will us already living in the property go against us when we go for a consessionary purchase?
pass

.

She would be a landlord and have tocomply with all tenancy laws. She'd need LLinsurance, gas certificayes etc etc se



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hazyjo

Presume meant to say:

"But note most lenders do NOT allow letting to family"

markin

Could you not just move in as a lodger, and she just happens to sleep at his house 5 days a week.... you would save that money a lot faster so it may only be for 4/5 months.

zagubov

markin wrote: »

Could you not just move in as a lodger, and she just happens to sleep at his house 5 days a week.... you would save that money a lot faster so it may only be for 4/5 months.

If the house remained her main residence and she retained it as her postal address, returned every week for a few days, shared a kitchen and/or bathroom with you at least part of the time, and paid all the utility bills, you might be her lodger(s).

That means there might be a HMRC liability if the tax was over the £7k -ish limit, but you might need to check whether two of you might mean that either the rent-a-room tax limit doesn't apply or it might mean that the house becomes more like a tenancy and/or a HMO situation in your borough/ county.

Marvel1

markin wrote: »

Could you not just move in as a lodger, and she just happens to sleep at his house 5 days a week.... you would save that money a lot faster so it may only be for 4/5 months.

I don't thin I would like the idea of their stuff being in the house and sleeping over 2 nights each week, I would want the whole house to myself.