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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

WIBU to buy a flat and rent it to disabled BIL who receives housing benefit?

39 replies

JasmineBuckles · 06/02/2017 16:46

I know it would be morally questionable, but would it actually be possible?

BIL lives in a horrible HA flat in a horrible area. He's very mild mannered and regularly has people knocking on the door asking for money, trying to break in etc.

We live in a nice house in a nice area and the thought of him being 20 miles away in a rough area really upsets me, probably more than DP.

He won't come and live with us, I've asked and asked.

We have a house from an inheritance that when we finish doing it up will be worth about £100k.

My plan is to sell it, put the money into a trust, then use it to put a deposit on a flat near us and use the rent/housing benefit to pay the mortgage.

Is this possible? I know we are on shaky ground morally, but we want BIL to be nearby in a nicer place than he is now.

OP posts:
tartanposies · 06/02/2017 16:48

Most mortgages don't allow renting to people on HB.

WaitrosePigeon · 06/02/2017 16:49

Don't think HB allows tenants to rent from family.

user1471537877 · 06/02/2017 16:50

I think that's one of the nicest suggestions I've heard this year

Hopefully it would be a win win situation, he gets a home with a good landlord in a more secure area for his disability and you'll get a long term tenant you feel happy with whilst being able to offer him support if he wants it

Good luckFlowers

donners312 · 06/02/2017 16:50

you will have to explain to the housing benefit that a family member owns the property and then they make a decision.

SouthWindsWesterly · 06/02/2017 16:51

^ what Waitrose said ^

Ilovecaindingle · 06/02/2017 16:51

There is a thread on here about a mners neighbour who did this for who dd. . Specific mortgages allow to let and Hb accepted with a proper tenancy between family members. Sounds like a peace of mind plan not to profit so don't feel that it's not OK!!

MatildaTheCat · 06/02/2017 16:51

I don't see any shaky ground morally. The question is whether it is legal. There are rules about BTL for the purpose of housing family members and this is the question you need to ask. Preferably to a professional.

You sound very caring so I hope it does work for you but would add that I have a son in my rental property and even so we have a proper tenancy agreement in place.

Coralfish · 06/02/2017 16:52

I think it's lovely that you want to help out BIL like this. I would suggest getting in touch with Citizens Advice, but I think that there would only be an issue if you you were charging him rent to live in your own home (with you). The set up you suggest does not sound morally or legally questionable to me, with my limited knowledge of Housing Benefit.

MollyRedskirts · 06/02/2017 16:52

It may not be possible. A lot of local authorities won't pay out housing benefit of the person claiming is renting from a relative. Some will allow it if a full market rent is being charged. I'd start looking there first, because it's a complete non-starter if it means your BIL would lose his housing benefit.

I can empathise - it must be horrible for you seeing that he's vulnerable and wanting to help, but not quite knowing how best to do it. Sad

PoundingTheStreets · 06/02/2017 16:53

I think you can, but you'll have to have a proper tenancy agreement in place. HB won't allow it to be an informal arrangement. As such, to be above board, you'd probably have to let it to your brother through an agency to show it is a proper landlord/tenant situation. The mortgage you get would also have to be a proper BTL mortgage, which is usually more expensive than a standard homeowner mortgage.

Eevee77 · 06/02/2017 16:53

HB likely won't allow it, they'll see it's a set up a mile off. We rent off family but we started with unstable jobs so did a lot of research first and it was indicated that as long as we had proof we were genuine tenants (contract and deposit in a scheme etc) and had been consistently paying rent off our own backs for months/years and then the worst happened and we lost our jobs, it would most likely be acceptated. But in your scenario? No way.

Coralfish · 06/02/2017 16:55

From the Citzens Advice website:
www.citizensadvice.org.uk/benefits/help-if-on-a-low-income/help-with-your-rent-housing-benefit/
See the 'when you will be treated as not paying rent' section.

strawberryblondebint · 06/02/2017 16:55

It's a thing called reg 9. You need to make sure he is treated as a normal tenant. Proper tenancy agreement and if he was to fall behind in rent you would evict as oer any other member. Google reg 9

Eevee77 · 06/02/2017 16:56

They also won't approve if they believe you won't evict him if he doesn't pay rent.

Eevee77 · 06/02/2017 16:56

This reply has been deleted

Message withdrawn at poster's request.

TheNameIsBarbara · 06/02/2017 16:58

It has to be a legitimate tenancy. Most HB isn't paid to family members who buy a flat specifically to claim HB as that is abuse of the system, but if you could prove it would be a proper tenancy then it may strengthen his chances to obtain housing benefit.

Questions to consider for the application: would you seek rent if he couldn't get housing benefit? How much would you charge? (HB tend to look dimly on families who charge HB rates rather than full rental rates for the area). Would you take steps to evict if BIL couldn't pay rent for any reason?

Look at getting proper advice, but you would definitely need to set out proper terms and conditions. If it wouldn't be a real tenancy but a 'fake' one to satisfy their requirements, they would not be likely to grant it. However, if you can answer the above questions, and treat it like a real tenancy then you would be more likely to secure HB for your BIL.

jay55 · 06/02/2017 16:59

It would be a contrived tenancy and it is on morally shaky ground to buy a place with the explicit intention of having the state pay your mortgage.

NeedsAsockamnesty · 06/02/2017 17:00

Don't think HB allows tenants to rent from family

They do of its a genuine and not a contrived tenancy

welovepancakes · 06/02/2017 17:01

If BIL has a social worker and / or existing care package, you could run it past them. Also think what you would do if BIL no longer qualified for housing benefit eg if he inherited money which took him over the eligibility limit

Coralfish · 06/02/2017 17:02

Sorry for the multiple posts.
From the Shelter site:
england.shelter.org.uk/housing_advice/housing_benefit/housing_benefit_renting_from_family
I think (personal opinion) it would be okay in theory, but it might be tricky logistically. He might have to move and then reapply and risk not getting it.
In my limited experience, when I applied for HB from a position of already living somewhere (but just moved in) they were so happy I already had somewhere to live for a rent below the maximum they would offer that they pretty much ticked it off in seconds.

Orangebird69 · 06/02/2017 17:03

You'd need to ensure the rent you charged was the going rate, and that the tenancy was a standard AST, deposit paid and registered etc. Then it would be considered properly.

ImperialBlether · 06/02/2017 17:04

She's not technically family. She's not married to his brother.

Toofat2BtheFly · 06/02/2017 17:05

I know of a case where the owner has given over the tenancy to a HA (for a management fee every month) for this exact purpose (as HB is paid to HA direct )

Its a win win for everyone concerned as the owner wouldn't have be able to pay a mortgage without a rental income and the tenant wouldn't have had a secure adapted property suitable for their needs .

Maybe something to enquire about in your local area op ?

MrsJayy · 06/02/2017 17:07

My uncle was renting to his dc and partner the DSS found out and stopped HB you would need to check it all out nothing wrong in doing it though.

Caboodle · 06/02/2017 17:11

How is it morally shaky ground? Seems a win-win to me. Hope you can achieve this for BiL's sake.