By To Let - Renting to a Family Member
Discussion
My sister is a DSS tenant - she's unwell and is (genuinely) unable to work as a result.
She's received notice to leave her current place but I'm really struggling to find anywhere of a decent standard which will accept housing benefit.
A couple of us siblings are thinking of clubbing together and buying somewhere; we're not rich but can get the deposit together to buy a small studio/1 bed. We'd then want to set up a formal rental agreement to rent the place back to her.
What do I need to think about before pursuing this avenue any further? It would be a formal agreement as we would need to pay the mortgage.
She's received notice to leave her current place but I'm really struggling to find anywhere of a decent standard which will accept housing benefit.
A couple of us siblings are thinking of clubbing together and buying somewhere; we're not rich but can get the deposit together to buy a small studio/1 bed. We'd then want to set up a formal rental agreement to rent the place back to her.
What do I need to think about before pursuing this avenue any further? It would be a formal agreement as we would need to pay the mortgage.
Mr Scruff said:
My sister is a DSS tenant - she's unwell and is (genuinely) unable to work as a result.
She's received notice to leave her current place but I'm really struggling to find anywhere of a decent standard which will accept housing benefit.
A couple of us siblings are thinking of clubbing together and buying somewhere; we're not rich but can get the deposit together to buy a small studio/1 bed. We'd then want to set up a formal rental agreement to rent the place back to her.
What do I need to think about before pursuing this avenue any further? It would be a formal agreement as we would need to pay the mortgage.
BTL lenders will not allow you to rent the property to an immediate family member................She's received notice to leave her current place but I'm really struggling to find anywhere of a decent standard which will accept housing benefit.
A couple of us siblings are thinking of clubbing together and buying somewhere; we're not rich but can get the deposit together to buy a small studio/1 bed. We'd then want to set up a formal rental agreement to rent the place back to her.
What do I need to think about before pursuing this avenue any further? It would be a formal agreement as we would need to pay the mortgage.
Mr Scruff said:
Sigh... I wish I wasn't surprised by that. 
Talk about things being harder than they should be. All I want to do is try and provide somewhere for her to live which isn't a complete hole with an unscrupulous landlord.
You need a second Residential mortgage for a Dependent Other.............but it's assessed on a Residential basis not as a BTL.............its pretty tricky but it's possible dependent on the circumstances.....Talk about things being harder than they should be. All I want to do is try and provide somewhere for her to live which isn't a complete hole with an unscrupulous landlord.
TooMany2cvs said:
And you'd be willing to evict the tenant should there be a problem, would you?
THAT's why they don't let you rent to immediate family members.
Oh, don't get me wrong, I get it, I'm just looking for a solution to a problem. Genuinely interested in any other suggestions - the housing stock that's available in our local area doesn't meet her needs so need to think of alternatives.THAT's why they don't let you rent to immediate family members.
Mr Scruff said:
Oh, don't get me wrong, I get it, I'm just looking for a solution to a problem. Genuinely interested in any other suggestions - the housing stock that's available in our local area doesn't meet her needs so need to think of alternatives.
If you can't get a residential mortgage for it between you (and you'd still have the legal obligations of a landlord), then your only real alternative is to either guarantee her rent to a private sector landlord or for her to live with one of you.Mr Scruff said:
TooMany2cvs said:
And you'd be willing to evict the tenant should there be a problem, would you?
THAT's why they don't let you rent to immediate family members.
Oh, don't get me wrong, I get it, I'm just looking for a solution to a problem. Genuinely interested in any other suggestions - the housing stock that's available in our local area doesn't meet her needs so need to think of alternatives.THAT's why they don't let you rent to immediate family members.
You would also get the benefits of residential rates over BTL rates. You can still offset the mortgage interest payments as its the purpose of the loan rather then what its secured against that counts.
Mr Scruff said:
By To Let - Renting to a Family Member
My sister is a DSS tenant - she's unwell and is (genuinely) unable to work as a result.
This will not end well for you. I'll give it 3 months until those entirely predictable words come: "can I pay you next month as I'm a bit short this month due to [insert feeble excuse here]". And then guess what happens next month.. .My sister is a DSS tenant - she's unwell and is (genuinely) unable to work as a result.
Stay out of it, or at least have a good read of the lengthy 'lending money to family and friends' thread if you think it won't happen to you.
Old Tyke said:
This will not end well for you. I'll give it 3 months until those entirely predictable words come: "can I pay you next month as I'm a bit short this month due to [insert feeble excuse here]". And then guess what happens next month.. .
Stay out of it, or at least have a good read of the lengthy 'lending money to family and friends' thread if you think it won't happen to you.
Oh I know, I'm well aware of this one. Idea is that all of us siblings would 'share' the risk as I'm not prepared to take on all the burden on my own, as well as a parent.Stay out of it, or at least have a good read of the lengthy 'lending money to family and friends' thread if you think it won't happen to you.
Need to figure out something though - I can't see her on the street and she can't stay with me for more reasons than I care to list.
Will think further.
Mr Scruff said:
Oh I know, I'm well aware of this one. Idea is that all of us siblings would 'share' the risk as I'm not prepared to take on all the burden on my own, as well as a parent.
Need to figure out something though - I can't see her on the street and she can't stay with me for more reasons than I care to list.
Will think further.
Tough one but she's got to stand on her own two feet as well. Like everyone else that can't have exactly what they want, she will have to make some sacrifices on location or room size or whatever as the current priority is just to get a roof over her head, not to be picky on the incidentals. What would she do if she didn't have you to nanny her? I am sure she would cope somehow. I know that sounds heartless but I've seen what happens when you become "too" helpful to family members that are worse off than yourself : they end up taking advantage of you and your good nature. Don't underestimate it and think it won't happen to you.Need to figure out something though - I can't see her on the street and she can't stay with me for more reasons than I care to list.
Will think further.
Have you tried your local gumtree site for private lets? That's usually the place that private landlords advertise. Also consider how her HB is paid. I think there's been some changes in the past few years but I know at one time you could have it set up so that it's paid straight to LL. LLs are generally happy to take on HB tenants in that situation as they know they won't have to chase for the rent. If it goes to the tenant then most won't touch HB tenants from bitter past experience. Can you get good refs from her previous LL? That would help massively. Also consider acting as a guarantor which while still not ideal and best avoided, would be far cheaper than part funding a house for her!
Why has she been given notice to leave her current place? Depending on the (true) reason that could have a big impact on things.
Edited by Old Tyke on Monday 3rd April 16:12
AIUI not all councils will pay HB to a tenant if they are renting from a family member. Google suggests otherwise so i could be completely wrong but i would definitely check with your Council before you went too far down that road.
With regards to renting to family, I've done it a couple of times and never had a problem. In both cases the tenants eventually bought the properties off me.
With regards to renting to family, I've done it a couple of times and never had a problem. In both cases the tenants eventually bought the properties off me.
Old Tyke said:
This will not end well for you. I'll give it 3 months until those entirely predictable words come: "can I pay you next month as I'm a bit short this month due to [insert feeble excuse here]". And then guess what happens next month.. .
Stay out of it, or at least have a good read of the lengthy 'lending money to family and friends' thread if you think it won't happen to you.
If the DSS are paying the rent, what exactly would be the advantage of the sister ruining her family's trust and jeopardizing the roof over her head to avoid the payment of money that she wouldn't keep anyway?Stay out of it, or at least have a good read of the lengthy 'lending money to family and friends' thread if you think it won't happen to you.
To counter the typical moany, pessimist attitude of PH, a close friend of mine has done something very similar for a couple of years. She rents her father's old flat via DSS. Not strictly above board and I have no idea how they managed to arrange it, but it works for the both of them - The father got to rent out a flat he was struggling to sell and is much closer to his grand children, while she got to move out a mouse infested private let in a hell hole to a place much more suitable for raising a young family.
I don't know the precise ins and outs, but I believe the DSS is paid directly to the landlord. Even if it wasn't, as I eluded to earlier, where is the incentive? If she kept it, she would be chased by the DSS, ruin her relationship with her family and jeopardize her entire living arrangements - As the OP has found, finding a half recent DSS landlord is impossible (and even if she did, a similar property would be more than what DSS would cover) and the council house ship sailed off about 20 years ago.
The real only issue I can see arising if when she eventually moves out, as the father has been far more relaxed about things like repainting the children's rooms, keeping pets and so on than a private landlord, but I'm a believer in when you do good things, good things come back - I'll be gladly volunteering to help the dad renovate the property in preparation for new tenants/sale when the time comes.
I'm sure there are some here that will have a heart attack that 'their' tax money is being used in this way, but I personally don't mind if my share of tax goes towards keeping a woman with a disability in a comfortable, safe home close to their family, even if it is a bit of a fiddle.
279 said:
If the DSS are paying the rent, what exactly would be the advantage of the sister ruining her family's trust and jeopardizing the roof over her head to avoid the payment of money that she wouldn't keep anyway?
To counter the typical moany, pessimist attitude of PH, a close friend of mine has done something very similar for a couple of years. She rents her father's old flat via DSS. Not strictly above board and I have no idea how they managed to arrange it, but it works for the both of them - The father got to rent out a flat he was struggling to sell and is much closer to his grand children, while she got to move out a mouse infested private let in a hell hole to a place much more suitable for raising a young family.
I don't know the precise ins and outs, but I believe the DSS is paid directly to the landlord. Even if it wasn't, as I eluded to earlier, where is the incentive? If she kept it, she would be chased by the DSS
If you had any knowledge or experience of council types (and I'm not suggesting that the OPs sis is) then you wouldn't have written the above. Suffice to say that you are somewhat naïve with your assumptions.To counter the typical moany, pessimist attitude of PH, a close friend of mine has done something very similar for a couple of years. She rents her father's old flat via DSS. Not strictly above board and I have no idea how they managed to arrange it, but it works for the both of them - The father got to rent out a flat he was struggling to sell and is much closer to his grand children, while she got to move out a mouse infested private let in a hell hole to a place much more suitable for raising a young family.
I don't know the precise ins and outs, but I believe the DSS is paid directly to the landlord. Even if it wasn't, as I eluded to earlier, where is the incentive? If she kept it, she would be chased by the DSS
Countdown said:
AIUI not all councils will pay HB to a tenant if they are renting from a family member. Google suggests otherwise so i could be completely wrong but i would definitely check with your Council before you went too far down that road.
With regards to renting to family, I've done it a couple of times and never had a problem. In both cases the tenants eventually bought the properties off me.
This!With regards to renting to family, I've done it a couple of times and never had a problem. In both cases the tenants eventually bought the properties off me.
A friend of mine was renting a proeprty from her father, she broke her leg and was off work for 7 months but was not able to claim HB as she was renting from a family member.
Old Tyke said:
If you had any knowledge or experience of council types (and I'm not suggesting that the OPs sis is) then you wouldn't have written the above. Suffice to say that you are somewhat naïve with your assumptions.
Having spent neigh on two decades being raised on a council estate, I have plenty of knowledge and experience of Council types thanks, seeing as I am one.As a typical powerfully built, home owning PHer, you are aware that that an awful lot of the value in your house has been grossly inflated partly by "council types" buying their and flipping their council homes, right?
You are also aware that while you get a warm feeling from knowing that your house has increased by XX% since buying, it is having a knock on effect that is evident in this very thread? - A sick lady who is unable to work is being turfed out of her home (undoubtedly because the L.L either wants to cash in on the market and sell, or rent to a non DSS tenant that has no choice but to pay more) and is unable to put an even vaguely comfortable roof over head unless her family steps in. And if you think that she would be able to find a nice, DSS accepting place if she changed her room requirements a bit or moved to a slightly different area, you are the naïve one.
And just to preempt a "It's not 'council types' like you I meant" comment, the vast majority of people I've seen come and go on my estate are nice, proud, well meaning people, there out of circumstance, not choice. Most even work (*gasp*). And the ones that don't do so because it rarely makes financial sense with childcare commitments and rent (even at a subsidized rent). Even the ropiest of drug/alcohol addicts that you'd cross the street to avoid are just people, trying to get on with life and rarely s
t on their own doorstep. You do get the occasional properly bad eggs, but then there are no shortage of non "council types" people experiencing dickish behavior from other home owners or private tenants, that's just people. There may be a higher percentage of those bad eggs who claim DSS, which is why I CAN understand why landlords won't rent to just any DSS tenant, but in this case is very different. Its his sister. He'll have a far better inclination of whether or not she has be trusted than the standard DSS=Council Type=Scum equation you've jumped to.
Edited by 279 on Monday 3rd April 18:58
Thanks for all the replies, they are all very much appreciated. I definitely agree with the notes of caution, even if they are family members, I speak from experience,
Current landlady is a private let/friend who wants her house back now. To be honest the environment isn't ideal anyway, it's full of the owner's clutter and makes it hard to keep clean.
I/we're not in a position to buy somewhere outright, it sounds like the only realistic option is to be guarantor.
My sisters's health issues are based around her mental wellbeing and she's not able to cope with the realities of life which is why we're stepping in.
Current landlady is a private let/friend who wants her house back now. To be honest the environment isn't ideal anyway, it's full of the owner's clutter and makes it hard to keep clean.
I/we're not in a position to buy somewhere outright, it sounds like the only realistic option is to be guarantor.
My sisters's health issues are based around her mental wellbeing and she's not able to cope with the realities of life which is why we're stepping in.
Mr Scruff said:
it sounds like the only realistic option is to be guarantor.
.
No.............I already provided you with the alternative option to a BTL mortgage;.
"You need a second Residential mortgage for a Dependent Other.............but it's assessed on a Residential basis not as a BTL.............its pretty tricky but it's possible dependent on the circumstances....."
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