Letting a property to a council tenant without a buy to let mortgage
I am looking at getting an ordinary mortgage to buy my housing association house getting my right to buy discount etc…..
I then want to move my nan into this house and she will live here for the rest of her life and I believe she has at least 20 years left in her, She would claim full housing benefit which would go into a different account my mortgage comes out of and I would still make sure my mortgage is paid in full – I will be working full time as well.
I would then move in with my girlfriend.
So long as the bank never finds out nor the council doing too many checks – would you say everything would be hunky dory with this set up? I know for a fact the mortgage would be paid with ease as she would always be living here and her housing benefit hasnt changed in 20 years or so……
Thanks all!
Matthew
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Buying the Freehold is it silly or impossible?
Member Since January 2011 - Comments: 12212 - Articles: 1408
9:45 AM, 7th July 2015, About 11 years ago
NOOOOOOOOOOOO!!!!!!!
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Member Since February 2011 - Comments: 3453 - Articles: 286
10:16 AM, 7th July 2015, About 11 years ago
You would be in breach of every contract here and just one of the repercussion could be that you are black listed from applying for future mortgages by all lenders.
Member Since July 2013 - Comments: 193
10:23 AM, 7th July 2015, About 11 years ago
Hi Matthew
Let me tell you straight. The bank WILL find out, and when they do they will call in the loan for breach of conditiions IF the conditions have in fact been breached.
If you’re planning on living in the house yourself I don’t see what the problem would be anyway, but you need to be straight with the bank and let them know you have a family member living there who is on Housing Benefit.
I recently informed my lender of a change in circumstances when a family member moved into my residential property and I moved out. In this instance they were happy to accept it and told me I didn’t need consent to let.
This may not always be the case though, so don’t do anything underhand or you could find yourself in big trouble.
Member Since January 2011 - Comments: 12212 - Articles: 1408
10:39 AM, 7th July 2015, About 11 years ago
I will spell this out very simply for you …
IT’S FRAUD
Mortgage Fraud certainly
Possibly benefits fraud
I also suspect that you would be obtaining the right to buy discount fraudulently.
The possible prison sentence for mortgage fraud alone is 14 years.
Despite all of that, it is morally wrong too.
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Member Since April 2014 - Comments: 163
10:53 AM, 7th July 2015, About 11 years ago
You want to risk your reputation, job and liberty for a few thousand pounds?? Don’t be an idiot!!!
Member Since May 2015 - Comments: 2204 - Articles: 2
1:00 PM, 7th July 2015, About 11 years ago
I think that Matthew will have got the message. Let us give credit to him for asking the question in advance of any action, thus avoiding the potential pitfalls.
Member Since July 2013 - Comments: 1266 - Articles: 1
3:25 PM, 7th July 2015, About 11 years ago
How won’t the council find out? It’s a right-to-buy. Your gran is going to claim LHA – don’t you think they would cross-check the address?
Where would you be living in the meantime? Renting? Even if this wasn’t very dodgy, the logic doesn’t stack up.
Member Since March 2015 - Comments: 1969 - Articles: 1
5:04 PM, 7th July 2015, About 11 years ago
You can’t claim LHA when renting from a family member.
Member Since September 2013 - Comments: 33
8:28 PM, 7th July 2015, About 11 years ago
You can, but the council will need proof that this is a genuine landlord /tenant relationship. I had to show an ast and proof of a BUY TO LET MORTGAGE.
Member Since September 2013 - Comments: 33
9:23 PM, 7th July 2015, About 11 years ago
Further to that last comment, it would now have to be a regulated buy to let mortgage. When I did this a number of years ago it did not need to be regulated.