UK Landlord Forum / Life

Hello everyone, new poster and seeking some advice...

I have a small mortgage on a flat, I've since moved in with my girlfriend and now looking to rent my flat out. A family member has been in contact - they would like my place though due to ill health are not working. I'm not looking to profit from this - I just need the mortgage covering which +/- £500 pm.

My question is, being family, am I able to rent to them and can they claim HB/UC on this?

Thank you for any advice you might offer.

There's a lot to sort out.

If your mortgage is a residential mortgage, you (almost certainly) aren't just allowed to let it out. You'll need consent to let - which again (almost certainly) will preclude letting it to a family member.

The problem with benefits is that the DWP will need absolute proof that the tenancy isn't "contrived". At best, your relative will spend a lot of time explaining the situation, at worst, they'll be forced to repay the benefits that they've received. But it will depend on the family relationship - if it's a second cousin it's not the same as if it's a brother, for example.

There are lots and lots of things you need to know about to and do to be a landlord and you need to decide if you're serious about this. For example, you need much more than just covering the mortgage - you'll be taxed on the income for a start, and things break and you'll have to fix them. You have to have the electrics tested (and for them to pass). If there's gas, that's another test.

Letting out a spare property is a good idea - but you need to do it properly.

Almost everyone responding is going to say never rent to family or friends. So I'll start. It's a terrible terrible idea.

Difficult situation, because you have been approached by this family member... it could be difficult to tell them "no" but that would be the advice you'll mostly receive here.

It isn't impossible to let to a family member in receipt of benefits... but one hurdle you'd need to jump is the idea of you just covering the mortgage... that in itself would be a problem... the kinds of questions the authorities will ask is whether the tenancy is on something akin to a commercial basis... is the property being offered at market rate and how did you decide on the rent level (a good answer here is not - "I'm helping out my family member with a huge discount from the true market rate just so I can cover my mortgage", and would you be prepared to let the property to anyone else other than your family member... and what action you would take if Housing Benefit, or rent, is not paid - the answer here being - "I would not let, or I would evict".

And you need to figure out - is that true - if the money wasn't paid to you by your family member (maybe because they'd concluded - all on their own - that you didn't really need the money, whereas they did - so they stop paying) then would you evict?

There will be subtle differences because of UC and different local authorities, I'm sure... but the pointer I'm giving you is relatively sound.

All family members are just that... until they do things family members should not. But we've seen it reported here, time and time again, how family relationships have broken down irretrievably through a rental situation gone bad. That's not to say it's a guarantee. Be careful and judicious in how you approach this.

I gave a gasp of horror when I read this question. The combination of factors you describe is just the perfect storm waiting to happen. A few years ago friends of mine had to go through the horror of bailiff eviction of their daughter and young grandchild. The plan to rent out their own home through an agent was hastily changed when daughter got pregnant, very flakey boyfriend. No rent expected, just cover council tax and utiities.Sounds like a good idea right?

"No good turn goes unpunished"  Oscar Wilde.

I concur, this is best avoided unless you like problems that can become hell.

The first hurdle is that the DWP will almost certainly delay any housing benefit and make the applicant appeal.

One option would be to remain in the property and provide your family member with a lodger agreement.
 
You would need to leave all your post and credit cards at the old property, continue to pay the FULL Council Tax and sleep there from time to time.

Family members are notoriously difficult to evict and it screws up your relationship, they will get over your polite denial of their request, but they will never forgive you for evicting them.

To say that this is "messy" is the understatement of the decade, some family members can turn into monsters and do not think for one minute that they would look after your property better than someone who is contracted to do so.

It would be better to do up the property, let it for as much as you can get away with and offer your family member some financial support from time to time with the difference between your mortgage and the rent.

The fact is that if they are genuinely on long term sick they should get their own place, there are Landlords who are OK with Benefits Tenants, particularly HMO's.  If your family member gets into one of those and their condition worsens they can apply for ESA and PIP, it is a big hurdle to get but they can try.  Thereafter if they are vulnerable as defined by the Housing Act, then they can present as homeless to the Council.  Again the bar is set high and the housing system is well past broken because of the boat people taking up any slack was was in the system.  Housing Benefit is now administered by Job Centre Plus for new applications.

Quote from: Froggat on October 31, 2023, 05:33:06 PMHello everyone, new poster and seeking some advice...

I have a small mortgage on a flat, I've since moved in with my girlfriend and now looking to rent my flat out. A family member has been in contact - they would like my place though due to ill health are not working. I'm not looking to profit from this - I just need the mortgage covering which +/- £500 pm.

My question is, being family, am I able to rent to them and can they claim HB/UC on this?

Thank you for any advice you might offer.

Quote from: David on November 01, 2023, 05:05:58 PMYou would need to leave all your post and credit cards at the old property, continue to pay the FULL Council Tax and sleep there from time to time.

You'd need to actually reside (ie. live) there, not just sleep there from time to time.

Residence is a matter of fact and while bills and council tax are indicative where your home is, if you're really living somewhere else with someone, it's not likely to be enough. Trying to pretend that a tenancy is a licence is something courts are pretty wise to. Of course that only really matters if something goes wrong and you want them to leave and the tenant doesn't want to go.

That is true and what I suggested was enough to defeat a Deposit Protection claim where the LL slept on the sofa, I seriously did not expect it to work out but they lived there initially and then moved out.  They got lucky, the key point was don't rent to family or friends for that matter.

You are right though, the person can only be a lodger if the Landlord is resident.

Ironically I had another case that took 9 months to resolve where a lodger brought a deposit claim against a Landlord who occasionally slept at his girlfriends house.

Quote from: jpkeates on November 01, 2023, 05:44:15 PMResidence is a matter of fact and while bills and council tax are indicative where your home is, if you're really living somewhere else with someone, it's not likely to be enough. Trying to pretend that a tenancy is a licence is something courts are pretty wise to. Of course that only really matters if something goes wrong and you want them to leave and the tenant doesn't want to go.

On this one, I hope the OP comes back and tells us the decision they've made - it's difficult and I can feel the pressure from miles away. It feels like they've been put into this position through no fault of their own too. At least we have been consistent in our advice and I hope the OP doesn't just see us as an overly negative group (although we obviously are).