How does a lodger affect UC eligibility in private rented accommodation?

sourpuss2021

Newcad said:

So you do have pernission to have a lodger, and if you emailed your LL about it recently then he knows you may be considering getting (another) one.

One thing we haven't mentioned up to now is Council Tax, if/when you have a lodger living with you then you don't qualify for a single persons CT discount.

It is a big rent increase, ideally your LL should have been increasing it each year rather in a lump, but I know that many LL's / tenants are in the same position.
The LL was doing the tenant a favour by not putting it up each year, but with costs and prices shooting up over the last year they are now ending up out of pocket themselves and so having to make big increases.

How does the new rent compare to what is being advertised locally for renting similar properties?
That is what any rent tribunal will be looking at if you do go down that route. (Of course that would also have implications for your LL/tenant relationship).

Whilst many LLs are traditionally averse to taking new tenants who are on benefits that is changing, it has to change because more than half the tenants in the country will be on UC by the end of next year (All those currently on Working Tax Credits will be migrated to UC).
But as long as the rent is being paid then a LL isn't bothered about where the tenant is getting the money from, wages or benefits as long as it ends up in the LLs account that's what they want..

Whilst we can give help and advice online a local advisor will be able to see any letters, bills, and other paperwork you have so can do a better job. They are also better placed to know local council rules, other local help, and so on.

PS. From what you are saying about July-Sept void periods then it sounds like you are talking about letting to a student?

The landlord is very wealthy and has no mortgage.  His family have owned this property for 50 years and he’s owned it for 25.  But money is money!   Yes smaller incremental roses would have been better.

I think the increase is too much because it’s really a 1.5 bed, since the second bedroom is only 5.5 sq.m which makes it only suitable for 0.5 people, in other words a child.  That’s the room I’ll be sleeping in, whilst having the 12 sq.m double as my lounge.  

However there’s also a very large lounge, the room I’ll be renting to a lodger, which in other properties I’ve seen often gets partitioned into two rooms.  So the overall floorspace is around 60 sq.m which is a fair and standard size for a 2-bed.

I’ve seen other 2-beds around here for £1700-£1750, less than the £1850 he’s asking.  They’re typically in better condition but smaller.  And I might not be able to store my bike inside, and I certainly wouldn’t be allowed my cat!

I’m 45 so I really need a solution that involves finding employment.  While also keeping a roof over my head while I find out what work looks like for me.

I am quite anxious now about where I might be living in 2 months, as well as 2, 5 and 10 years.  I’m wondering about whether this might be a sign that I should just leave London.  But I don’t see how that would help much either.  

My parents are still alive and although not overjoyed at the prospect they’d still have me back living with them.   I’d certainly like to spend more time with them while they’re alive, as there’s little that nurtures me in London.  But - all day every day? I’m not sure about that either.  Still, I could learn to drive, and work on re-training for a career in a supportive environment. 

Newcad

Looking for a smaller, cheaper place to rent would usually be the suggestion.

But with the rental market as it is, and with being out of work, then that is not going to be easy if possible at all.

Even if you moved out of the city to somewhere with cheaper rents you still have the problem of finding a private landlord who will take a new tenant who is wholey dependent on benefits.
It can be done, but such private landlords are few and far between at the moment.

sourpuss2021

Newcad said:

Looking for a smaller, cheaper place to rent would usually be the suggestion.

But with the rental market as it is, and with being out of work, then that is not going to be easy if possible at all.

Even if you moved out of the city to somewhere with cheaper rents you still have the problem of finding a private landlord who will take a new tenant who is wholey dependent on benefits.
It can be done, but such private landlords are few and far between at the moment.

Yes, realistically speaking it’s either here or my parents.

Once I can get work sorted I was imagining renting a room as a lodger myself or flat-sharer somewhere else in London where they don’t care about your age.  That’s something I may look in to.  

I feel I could be quite vulnerable living in a lot of places in the UK, being single, mid-40s, and partially deaf.  My one ear does hear well enough that I don’t disclose my deafness to most people, but I do wear a hearing aid even in that ear (the other ear has no hearing at all) and it certainly is a large factor in why my life has been so small.

I wouldn’t want to live somewhere where it’s only families and I’m seen as the local loner / oddball.  Or where there’s packs of teenagers/ youths I’m having to hurry past and avoid being noticed. 

Anyway - I’ll try to find an advisor to speak to in person.  It might be that rushing on to UC is too big of a risk until I have employment sorted.  And getting HB at the full LHA rate together with a 35% of the money from a lodger paying 50% of the actual rent and bills, together with help from family, will be just about manageable and the most stable solution in the short term.  I’ll have to do the sums. 

Spoonie_Turtle

If you get to speak to an adviser, talking to them about potential PIP and what work capability group you might be in, whether you meet the criteria for either LCW/RA or whether you'd likely be classed as fit for work.  Just so you're making decisions with as much information as possible.  You don't want to rely on getting X amount then find out you don't meet the criteria for everything you'd thought.

sourpuss2021

Spoonie_Turtle said:

If you get to speak to an adviser, talking to them about potential PIP and what work capability group you might be in, whether you meet the criteria for either LCW/RA or whether you'd likely be classed as fit for work.  Just so you're making decisions with as much information as possible.  You don't want to rely on getting X amount then find out you don't meet the criteria for everything you'd thought.

Thanks, will do.

Housing Benefit + a lodger paying 50% of the actual increased rent and bills doesn’t look feasible.  Because HB makes no allowance for the fact that the rent will be £500 above the LHA.  

The online calculator gives me a total HB plus lodger income of £2021 if the lodger is a student, or £2025 if they’re a professional (with me still charging a student 50% of 75% of council tax).   But the flat will cost £2158 or £2185 including bills, depending on council tax status. 

That’s before I’ve even thought about feeding myself or monthly payments towards other debts, of which I have about about £3.7k.  Two cards which are currently interest-free, and a zero-interest store loan which still requires monthly payments of £62.

Jyana

It sounds like the £20k+ work you have put into these flats over the last year or so is starting to sound like a bit of a mistake, did you get the second lodger in your flat that you talked about once you got the new carpets in earlier this year? Is the rent also rising on the other two flats in the building you rent out, or just the one you live in and have made changes to in order to rent to two lodgers?

As Spoonie says, I think that you need to get some professional advice on this, obviously disclosing the fact that you are self-employed as a landlord for the other two flats as well as the one you live in too as they will more than likely trace it if you omit that detail to them. 

You could also try and get your landlord to rethink his rent increase due to your improvements. However, could it be possible that he is making the large step up now due to how much the improvements have made the made the property a sellable prospect now?

sourpuss2021

Good spot

I’ll very shortly only be renting one flat!   

The subtenants moved out of one and I handed it back to the LL because he wanted too much for it and it needed money spending on it. It’s currently empty while he tries to advertise it for an absurd price, having done nothing to it. 

The one that I’d already spent money on, it looks like he’s taking that one back too and will be charging a much higher rent for it himself in future.  But I’ll get back some of the money I put in.  

In short, the landlord has struck back!   I don’t think he’d be planning to sell as he’d face an enormous capital gains tax bill after 25 years ownership.  But who knows - it would still get him a lot of money in the bank and he could get a decent interest rate on it.

Anyway, I won’t be getting a second lodger as I’ve clarified it would be against HMO laws.  And the landlord has said I can only have one anyway.  At the moment I have none as my most recent lodger moved out at the end of August as planned.

It does look like this house of cards is tumbling down.

peteuk

Sorry I might be missing the point here - 
OP rent is £1850
HB is £1350 
Lodger pays £1400
Benefits - ????

So lodger+HB+£2750. Which leaves £900 when rent is paid + other benefits…

Id personally be thankful that my LL hasn’t raised my rent for 5 yrs, allows a lodger ect rather than trying to take them to tribunal for the rent rise. 

Spoonie_Turtle

peteuk said:

Sorry I might be missing the point here - 
OP rent is £1850
HB is £1350 
Lodger pays £1400
Benefits - ????

So lodger+HB+£2750. Which leaves £900 when rent is paid + other benefits…

Id personally be thankful that my LL hasn’t raised my rent for 5 yrs, allows a lodger ect rather than trying to take them to tribunal for the rent rise. 

From their post a couple before yours, between HB and the lodger there's still a shortfall of ~£130-150.  I don't think OP has any other income, except maybe any profit from the one other flat they're currently letting out?

"The online calculator gives me a total HB plus lodger income of £2021 if the lodger is a student, or £2025 if they’re a professional (with me still charging a student 50% of 75% of council tax).   But the flat will cost £2158 or £2185 including bills, depending on council tax status."

Re: being grateful to the landlord, from OP's other posts … it's complicated.  The LL allows things but doesn't seem to do anything either, OP has been doing all the work for them and investing money to maintain the flats.