If the property had been previously rented at the same rent under the same tenancy agreement it would be easy to prove that you were treating your niece in the same way as any other tenant. Unfortunately, you don't have any other tenants for them to compare with, which will make their decision making less clear-cut.
It is human nature that peer-pressure encourages us to treat family in a generous manner - quite the opposite of what you need to prove to the council. I do echo Artfuls fears about the difficulty of evicting 'poor little Suzy' in the face of family opposition.
The advice I give on this forum is for general information only. I can provide specialist advice on many tenancy matters including eviction,
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