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Original poster

Property and universal credit question

21 replies

2Grannies · 02/03/2024 08:03

Hello, I wasn’t sure where to post or how to word my title, but I am hoping someone can help.
my dd is pregnant and the plan was for them to move into a property that I bought prior to getting married
My house is just a bit too far from where dd and her partner work so I am considering selling it and buying something closer.
she will be entitled to a bit of help with the rent but would UC still pay this if she is moving into a property bought specifically for the purpose of her living in that has never been let out before.
I wouldn’t be profiting as the rent will only cover the mortgage payments but I’m not sure how it works.
thanks for any advice

OP posts:

Whereshallwelivee · 02/03/2024 08:16

Not sure about UC, but when we claimed housing benefit years ago, you couldn’t claim for a property that you were renting from a family member.

I think your best way forward is to try to speak to someone and find out the rules.

Whereshallwelivee · 02/03/2024 08:19

she will be entitled to a bit of help with the rent but would UC still pay this if she is moving into a property bought specifically for the purpose of her living in that has never been let out before

They wouldn’t care about that bit. A house being rented out is a house being rented out, regardless of why it was bought. You wouldn’t even have to disclose that bit to anyone.

The only snag may be renting from a close family member while receiving the housing element of UC. I last claimed HB a decade ago, so things may be different now.

supermamio · 02/03/2024 08:23

A few years ago i rented a property from a family friend, same kind of scenario - only paid rent to cover mortgage. I claimed the housing element of UC and had to produce a Lease/ rent agreement signed by us both. No one asked if i knew the landlord. UC will only pay a certain amout depending on entitlement, so i rented a 3 bed from a family friend but as i only had 1 child was only entitled to claim the amount for a 2 bed .

Interested in this thread?

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OppsUpsSide · 02/03/2024 08:25

No she won’t get the housing element part if renting it from you, they do ask the landlords details.

Pastachocolate · 02/03/2024 08:30

It is possible as you will not be living with them. As you are a close family member they will look at whether this is a genuine tenancy or in place to take advantage of the benefits system.

Whereshallwelivee · 02/03/2024 08:30

Lots of people do it though. While they ask for landlord details, if you had a different surname, I doubt anyone else ask.

Pastachocolate · 02/03/2024 08:32

You are asked whether the landlord is a family member or if you set up a company whether a director of the company is a family member.

OakGreen · 02/03/2024 08:37

No, UC's housing support does not cover special rental arrangement made between family members. She might get away with it as UC doesn't ask the relationship with the landlord but if they find out, they can ask the money back, I have known someone had that happened to them.

user1474127873 · 02/03/2024 08:37

It's a few years since I worked in Housing Benefits, and before UC, so it may have changed, but the claim form specifically asked if you were related to the landlord. If you were, and the property hadn't been previously let on a commercial basis, it was only in very specific cases where HB was paid (for example, fleeing abuse).

SPsmama · 02/03/2024 08:41

She won't be able to claim the housing element if she's renting from family. My MIL was going to rent her house out to either me or my SIL but neither of us would've been able to get help.

Original poster

2Grannies · 02/03/2024 08:50

Thanks for the advice everyone. I can understand why that rule would be in place.
She is making an appointment with citizens advice. I guess she just needs to work out how much help she would get renting on the open market v the low rent i would charge her.
thanks again

OP posts:

StopGo · 02/03/2024 08:59

It is possible to claim UC if renting from family. Complicated but possible. You have to prove that you have an enforceable tenancy agreement.

Shelter would be able to guide on this.

Nonametonight · 02/03/2024 09:42

It's risky - because you're a close family member the DWP will scrutinise things to check this is a real tenancy. The fact that you bought the property specifically for your daughter to live in and it hasn't been rented out before will incline DWP to decide it isn't a real tenancy.

No one can give you a completely certain answer on this because it will all come down to the decision maker. And you cannot get a decision taken on this before your daughter moves into the property.

If your daughter isn't awarded any universal credit help with rent, will you still expect her to pay the full rent? Will you evict her if she falls behind? If the answer to either of those looks to the DWP like it's likely to be 'no' then they won't award any housing element .

Original poster

2Grannies · 02/03/2024 17:19

@Nonametonight the full market rent for the little house I’m looking at would be about 1200, and my mortgage would be about 400.
Im not looking for profit so maybe I could just charge them the 400 and forget about UC
thanks again all for the advice

OP posts:

Babyroobs · 02/03/2024 17:39

If you had rented the house out to someone else previously it would likely not be a problem but that doesn't sound like it's the case here so could be seen as a contrived tenancy so would not be allowed.
To be honest though if she doesn't claim rent element she would get the higher work allowance anyway ( the amount that is disregarded from earnings before earnings reduce total UC ) once she has the baby and if you weren't going to charge her much rent anyway, she may not be too much worse off by not claiming the rent element.
Does she have a partner - with two of them earnings and only one child realistically they may not even qualify for any Uc anyway ( rent element included or not ) until she drops to smp, as thresholds are quite low. They certainly won't get anything until the baby is born.

keffie12 · 02/03/2024 17:42

@2grannies It's an absolute no she can't get any help because you are related. U.C. rent help is not what housing benefit was.

You can not rent from family whatever the circumstances. They will not pay the rent.

If you lie and get caught, you both will be up for fraud and in serious trouble.

I do voluntary with benefits at our local church, so I have access and experience of this.

I've seen this happen before, and people are not able to claim rent.

Though some will say, "You can claim if they don't live with you,"

The answer is still no. I've seen this scenario a few times. Emergency housing has had to step in and rehouse the person/s because they couldn't pay the rent

Babyroobs · 02/03/2024 17:46

keffie12 · 02/03/2024 17:42

@2grannies It's an absolute no she can't get any help because you are related. U.C. rent help is not what housing benefit was.

You can not rent from family whatever the circumstances. They will not pay the rent.

If you lie and get caught, you both will be up for fraud and in serious trouble.

I do voluntary with benefits at our local church, so I have access and experience of this.

I've seen this happen before, and people are not able to claim rent.

Though some will say, "You can claim if they don't live with you,"

The answer is still no. I've seen this scenario a few times. Emergency housing has had to step in and rehouse the person/s because they couldn't pay the rent

This is simply not true. People can rent form family and get help but they have to show that it is not a contrived tenancy, that they are charging their relative market rent etc. In this case I doubt it will be allowed as op is buying a new property and not rented it out before. If she had been renting her old property to he daughter and could prove that it was rented previously and therefore was not being purchase purely to help her daughter out then it would likely be deemed ok. Loads of people receive UC rent element to rent off their family. I don't personally agree with it at all but it is allowed.

keffie12 · 02/03/2024 17:54

@babyroobs I work in this area and have seen many times this happen. One just recently. They were fine on housing benefit getting paid.

When they had to transfer to universal credit, they refused to pay the rent because they lived in family property, which they had done for 3 years. The family who owned it did not live there either.

I don't make the rules. I am telling you what I've seen of correspondence and from my resources

Babyroobs · 02/03/2024 17:57

keffie12 · 02/03/2024 17:54

@babyroobs I work in this area and have seen many times this happen. One just recently. They were fine on housing benefit getting paid.

When they had to transfer to universal credit, they refused to pay the rent because they lived in family property, which they had done for 3 years. The family who owned it did not live there either.

I don't make the rules. I am telling you what I've seen of correspondence and from my resources

Did they challenge the decision ? It does have to go to a decision maker usually but lots of people rent from family. I also work in this area and have not had the same experience as you at all.

keffie12 · 02/03/2024 18:05

@babyroobs Yes, the decision was challenged as I did the process with them right through.

As it happened, though, it was messy and stressful for them because of the situation, I was able to get them in with housing options (emergency housing) and get them rehoused.

I have had another two cases with the same result.

I know of one other person who got away with it. However, they lied because the surnames were different.

I told them I didn't want to get involved on the housing side because of the lies

Original poster

2Grannies · 05/03/2024 06:44

I just thought I would update. Dd had a telephone call with citizens advice. The man said that she would be able to claim UC on a new purchase as long as I won’t be living with her and we have a genuine tenancy agreement which I would enforce, ir evict her if she broke the terms.
i made her query all of the points raised here but he was adamant she would have no problems.
thanks again for all of the advice. I’m still not 100% sure it will be plain sailing as it seems such a minefield but at least it seems possible

OP posts:

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