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Buy to let to rent to relative.
Jimbo6376
Posts: 11 Forumite
Hi all.
I live in Devon but my mum lives in Oxfordshire. She really want to and needs to move down to be closer to me. She’s in a housing association flat and rent is payed by pension credits. I have put her on the list for local accommodation but she is quite far down the list.
I live in Devon but my mum lives in Oxfordshire. She really want to and needs to move down to be closer to me. She’s in a housing association flat and rent is payed by pension credits. I have put her on the list for local accommodation but she is quite far down the list.
I found out that I could buy a flat on an interest free buy to let mortgage. I thought that I could do this and rent to my mum but I’ve been told by a friend that you can’t rent to relatives on buy to let accommodation.
Is this true?
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It depends on the conditions of the lender, but certainly many BTL lenders don't agree to letting to family because of the obvious reluctance of LLs to evict where arrears arise, and the knock on effect on repossession if the mortgage goes into arrears.Some lenders also don't agree tenancies to claimants, though I believe this may be illegal on discriminatory grounds.now.Either way, speak to an independant mortgage broker who deals with BTL mortgages.You also need to consider the security mum has in a HA property, which she'll lose under this plan.If youlost your job, got divorced, or had some other life-event that meant you needed to sell, mum cood end uphomeless...0
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You might be able to rent to a relative on a buy to let mortgage if the tenancy is an arms length at a market rate.
It is unlikely that you will get the rent paid by housing benefit though.0 -
If you already have a property, you have budgeted for the extra 3% stamp duty land tax on the purchase?Jimbo6376 said:Hi all.
I live in Devon but my mum lives in Oxfordshire. She really want to and needs to move down to be closer to me. She’s in a housing association flat and rent is payed by pension credits. I have put her on the list for local accommodation but she is quite far down the list.I found out that I could buy a flat on an interest free buy to let mortgage. I thought that I could do this and rent to my mum but I’ve been told by a friend that you can’t rent to relatives on buy to let accommodation.Is this true?0 -
OP metioned Pension Credit. Is that different and would the same issue arise (I'm no benefits expert at all!)maisie_cat said:You might be able to rent to a relative on a buy to let mortgage if the tenancy is an arms length at a market rate.
It is unlikely that you will get the rent paid by housing benefit though.
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Also, I doubt the mortgage is interest free!4
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buy a flat on an interest free buy to let mortgage.
Please let us know which lender is doing this.1 -
You'll need a regulated BTL mortgage. With 99% of BTL mortgages only available through brokers you'll be advised accordingly in any event.1
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Could you afford the mortgage if your mum can't pay the rent? And would you be ok with that? If not than this sounds like a bad idea.0
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