Letting to Family Member
I would really value some advice about letting to a family member please.
I have recently retired and purchased a “retirement home” for my wife and myself.
My intention is to let my current property to my daughter and I have consequently contacted my mortgage provider (Woolwich – Barclays) for permission to do this. Reading the application form that I received from them suggests that consent will not be given as my daughter is currently in receipt of Housing Benefit (£970 / month).
My mortgage situation is that I have an interest only tracker mortgage for which I am paying £46 per month, the mortgage completes in February 2016. I have for a number of years been overpaying and reduced the amount that needs to be repaid by £13,000.
My question is would the Woolwich / Barclays be likely to consent to my letting to my daughter given the minimal mortgage repayment amount, less than 3 years to completion and my having overpaid by £13,000?
The local council have agreed to pay the monthly £970 rent directly into my bank account.
Whilst I would wish to do things legitimately my daughters current tenancy expires at the end of July and with no hope of obtaining alternative accommodation at the LHA rate I feel that I have limited options.
Any advice would be most gratefully received
Many Thanks Dave
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Neil Gammie of Birmingham
Member Since August 2013 - Comments: 31
5:15 PM, 24th June 2013, About 13 years ago
Hi all
Looks like the question has been answered about Local Housing Allowance being paid to a landlord who is a relative of the tenant, at least in this particular, as Dave has had written confirmation that the local authority will pay Housing Benefit in this instance. 🙂
The other thread that Mark mentioned is this one:
https://www.property118.com/can-the-housing-benefit-office-do-this/31304/
There are also two other comments on this subject in this thread:
https://www.property118.com/question-regarding-local-authority-homeless-policy/30978/#comment-17105
https://www.property118.com/question-regarding-local-authority-homeless-policy/30978/#comment-17138
6:43 PM, 24th June 2013, About 13 years ago
The applications I have looked at recently specifically prohibit a landlord living in the property. If there has been no problem then either they are old mortgages before these clauses were put in or the landlord has kept quiet and risks having the mortgage foreclosed.
8:37 PM, 24th June 2013, About 13 years ago
Regarding LHA you are not normally eligible in the property of a close relative:
https://www.gov.uk/housing-benefit/eligibility
Member Since August 2013 - Comments: 31
9:38 PM, 24th June 2013, About 13 years ago
Hi Sarah
It’s the phrasing of that sentence that is important: “Who isn’t eligible: Usually you won’t get Housing Benefit if you live in the home of a close relative.”
Using the word ‘home’ means that that ‘ineligibility’ is only applicable if the tenant and the landlord (who in this case are close relatives) are living in the same property, i.e. that the landlord who is a close relative of the tenant is a resident landlord.
A tenant whose landlord is a close relative is entitled to claim and may be awarded Housing Benefit – as long as the tenant and the landlord are not living in the same property.
Adam
Member Since January 2011 - Comments: 12206 - Articles: 1403
10:16 PM, 24th June 2013, About 13 years ago
Hi Sarah
Just to confirm, Adam is posting here by invitation from me as I know that he works in Housing Benefits as can also be seen by the threads he’s linked to where he has previously commented under his Twitter name @Zeeblebum. For personal reasons Adam does not wish to disclose his identity.
10:33 PM, 24th June 2013, About 13 years ago
Dear Adam
I’m afraid that is not necessarily so and it does not refer only to resident landlords(although the link I gave does, sorry) – I have investigated this on my own account. The thinking is that you might be setting up a situation just to obtain LHA.
http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member (para 2)
Somewhere I now can’t find, I read that the landlord has to show he is a professional landlord which might not be the case here.
10:38 PM, 24th June 2013, About 13 years ago
Just read Mark’s offering regarding your credentials. I bow to superior knowledge but have had a different response myself when my family member application was rejected.
Member Since January 2011 - Comments: 12206 - Articles: 1403
10:41 PM, 24th June 2013, About 13 years ago
@Sarah B, what were the circumstances under which you were declined?
10:42 PM, 24th June 2013, About 13 years ago
He was told that as a family member he was not eligible so did not pursue a claim.
Member Since August 2013 - Comments: 31
6:46 PM, 26th June 2013, About 13 years ago
Mark – Thanks for the introduction! Just for clarity, though – I work for a local authority homelessness service, not Housing Benefits. 🙂
Sarah – That’s a really useful link to the Shelter site. The ‘Housing benefit if living in a property owned by a family member’ paragraph sums up the situation very well.