My daughter & her 2 children are in rented housing association accommodation & receives housing benefits. If I was to buy a house would she be able to rent it & still claim the housing benefits to pay it.
Speak to the benefits section at the council, they say you can't claim LHA if you rent from a relative, but, if the property has been bought and rented out on a commercial basis before your daughter moved in it might not be a problem.
Just looking at the Shelter website it looks like it would be possible but potentially quite difficult. I can see why it would make sense for you, though - you get an investment property with a good sitting tenant, and she gets a trustworthy landlord who isn't likely to decide to sell up or evict.