View Full Version : Renting to my daughter
08-05-2008, 09:46 AM
I have a 3 bed property to rent to my daughter and her boyfriend. She is a full time student and he is unemployed. What effect would my daughter living at the property have on the amount her boyfriend would receive in applying for housing benefit?
08-05-2008, 09:50 AM
Is the property mortgaged?
08-05-2008, 09:53 AM
Yes it is mortgaged - i have previously rented the property
08-05-2008, 10:06 AM
Sorry, should have asked if it was a BTL mortgage.
If it is a BTL mortgage, the majority of lenders do not permit family members as tenants. It'll be written in the mortgage terms and conditions to which you agree and sign up to.
Additionally, you need to know whether the mortgage lender will permit a HB tenant to sign a tenancy agreement for the property. A change of tenants' circumstances requiring an HB claim after the commencement of a tenancy is one thing, but to initiate a tenancy agreement with an HB claimant is usually unacceptable to the majority of lenders.
08-05-2008, 10:18 AM
Be careful to make it clear to the HB about relationships, be open and honest. They may view this as a contrived tenancy especially if you are not up front about the relationships.
08-05-2008, 10:21 AM
It is not a BTL mortgage and I previously let to a HB tenent
08-05-2008, 10:22 AM
petjoke: why not let to daughter's boyfriend as sole tenant, to avoid "no letting to family" problem?
08-05-2008, 10:29 AM
I need to be open about their relationship as my daughter insists on this
08-05-2008, 10:48 AM
I need to be open about their relationship as my daughter insists on this
Depends on how LHA/HB/DSS people interpret the term 'family', I guess.
08-05-2008, 11:28 AM
had some experience with inter family lettings.
agree you need to be up front and honest about who's who and what's where with the HB / council guys.
From memory, our bottom line was that they needed to be assured that it was first and foremost a business deal. contracts in place and if if rent not paid, tenant will get no special favours. they may well visit and spend more time on the case.
only thing i can think of with regards to claiming benefit: will they not say that a 3 bed house is unnecessary for a couple? Although I suppose benefit paid will just be reduced - he/she will be asked to pay up the difference.
08-05-2008, 11:54 AM
I know it's not part of your original question, but do think carefully about renting to family members. If they dont pay the rent are you really ready to evict them and take her to Court for the money or to charge for defects to the property? Doing business or renting to friends and family doesnt work in my personal experience, its fraught with problems. Take care.
08-05-2008, 11:55 AM
Thanks for your reply. My daughter isn't eligible for HB as she's a FT student. Do you think HB will pay her boyfriend a reasonable amount and the council tax? I need to have some idea as I need some income as i can only subsidise them to a degree.
08-05-2008, 11:58 AM
If daughter (student) cohabits with him, that will of course reduce Council Tax by 25%.
08-05-2008, 12:20 PM
Thanks for your reply. Do you think HB will pay her boyfriend a reasonable amount and the council tax? I need to have some idea as I need some income as i can only subsidise them to a degree.
the word 'subsidise' makes me think that you're looking to give them a preferential deal over any other tenant that might pay you the going rate for your property.
which you are of course. they are family.... but the hb people are likely to take a dim view (or rather a keener interest) if they think that they are in any way being 'scammed' (wrong word i know but cant think of another. i suppose 'used' might be better).
forgetting the family connection, could they afford to rent this house from you (whether thats with or without hb assistance?)
08-05-2008, 12:30 PM
Due to the fact:
Own the property
Pay a residential mortgage (or is there something else you need to clarify? we won't tell your lender that you're renting it... ;) )
Your daughter is not an HB claimant
I would rent the property on an AST agreement solely to your daughter for six months. The boyfriend would merely live with her as a lodger at her discretion. Your daughter must be solely responsible for the rent paid to you. It equally follows that your daughter is responsible for household bills. It will be up to your daughter whether she accepts rent and shares bills with the boyfriend - that'll be a good test of a relationship. Whether the boyfriend receives HB is not your concern because he ain't your tenant if you do things this way.
If your daughter can't afford the whole rent and/or she doesn't trust the boyfriend to do the right thing - then do not let to either of them at all.
At the end of the day, if you decide that you want to evict your daughter through the courts, the boyfriend wouldn't come into it because he ain't your tenant.
Keep it simple.
08-05-2008, 16:19 PM
Thanks Poppy. Problem is, would this be financially viable as students are not leligible for HB. She currently lives with me and only receives £100 pw student loan.
08-05-2008, 16:30 PM
Financially viable for whom?
You daughter? whose income is £100 per week
For you? property sitting there (probably) not earning enough to cover the mortgage and maintenance.
Out of interest, What's the market rate for similar properties to let in your property's neighbourhood? I think that alone will answer your question.
08-05-2008, 16:41 PM
The going rate is £100 per week in this area. I need a minimum of £50 per week which my daughter couldn't afford on her own - this is the problem.
08-05-2008, 16:48 PM
Well I think you are saying I want my daughter to pay at least £50 per week, but she cannot afford to without getting all complicated by involving the HB boyfriend and all the unwanted negative effects that may follow by way of the local authority. Therefore it is not financially viable for me (the landlord/dad).
It's a tough situation when family are concerned. Have you considered tough love and she simply continues to live with you at home?
08-05-2008, 17:03 PM
perhaps your daughter and her bf should go to the hb guys and tell them the offer they've been given:- a 3 bedroom house for, what, 216 a month. Taken into account your daughters income, the bf's presumed jobseekers or whatever he gets ... hb guys should give indication of what he can claim in hb and they'll give indication of whether the family thing will be an issue.
i still stand by what i said before but your circs are a bit different because you are willing to subsidise. Perhaps the hb people will see it as a good deal:- cost less to keep claimant in this than anywhere else. in fact he culd probably claim the whole 216 a month. the only issue i can see if whether they will clock that he (or rather they) are paying for his student girlfriend....
if your daughter wants to contribute less than the 25 a week you're proposing...(not a desperately bad sum on the income she has) she could always get two other lodgers in for the other rooms, couldnt she?
08-05-2008, 17:08 PM
just seen poppy's reply.
if i was you i would tell daughter and bf that, as a couple, they can have the house for the going rate of £100.00 a week on a pucker contract.
if they want it then its up to them to speak to the authorities and work out if and how they can afford it.
at the going rate it's still a good deal. nice big start up house for a couple with a sympathetic landlord who is not going to want to credit check and take a deposit......
08-05-2008, 17:18 PM
...a sympathetic landlord who is not going to want to credit check and take a deposit.
Perhaps a parental guarantee, though?!
08-05-2008, 18:26 PM
The way Local Housing Allowance works for people on Housing Benefit, your daughter and her boyfriend would only be given the rent to pay for a one bedroom house/flat, if they are allowed to claim it.
The rate your council will pay can be found here.
They would have to make up any shortfall in the rent charged by their landlord.
08-05-2008, 23:24 PM
Thank you everyone for all your advice. It has been helpful in identifying the key issues. Down to me now to make a decision. If you think of anything else .........
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