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Original poster

No housing benefit because I rent from my brother??

20 replies

mama2moo · 11/02/2012 21:01

Is this true? I pay the going rate for my house (which is my brothers house)

I have just become a single parent of 2 young children. I have completed an online form which says you cannot claim because of renting from a close relative.

Thanks.

OP posts:

michglas · 11/02/2012 21:03

Tis true i'm afraid - a friend of mine found this out when she divorced, she moved to a house rented from her parents and couldn't claim housing benefit.

An0therName · 11/02/2012 22:36

not always the case - this is from shelter website

if you can prove you were paying rent before claiming HB I think this will help
I think I would get down the CAB for help though

england.shelter.org.uk/get_advice/paying_for_a_home/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member

I live in a property owned by a family member

If you live in a property owned by a family member and pay them rent, you may be entitled to housing benefit. The council will want to take a detailed look at your agreement with your landlord. You won?t get housing benefit if:

you're not paying rent on a commercial basis
the arrangement has been set up to take advantage of the housing benefit system ? this is called a ?contrived tenancy?. For example, if your landlord only asks you to pay rent when you are not working (and so are eligible for housing benefit), but not when you are working (and earning too much to qualify for housing benefit), this would be a contrived tenancy.

ShagOBite · 11/02/2012 22:41

Makes sense to me.

Original poster

mama2moo · 12/02/2012 20:39

Thanks all. I have been paying rent to my brother for nearly 3 years but it isnt 'official'. I pay the same amount every month and treat it as if it wasnt a relative IYSWIM.

OP posts:

RandomMess · 12/02/2012 22:35

What do you mean "official" - he hasn't declared it for tax reasons?

If you pay him via bank and can prove that you have for 3 years then I would think that the council would accept that.

LowRegNumber · 12/02/2012 22:47

The easy solution is to download and sign a shorthold tenancy agreement to show h.b. and set up your let through an agent. Most agents are happy to do rent collect only. Because it is one step removed and payments are traceable/accountable that is usually enough to keep h.b. happy. You can also get a 'rent statement' from your brother showing payments being made (with dates/amounts) that tally with your own statements to further underpin the commercial aspect of the let.

callmemrs · 13/02/2012 09:51

Youve been paying rent but not 'Officially'? Sounds a bit dodgy

ShagOBite · 13/02/2012 10:16

Surely that means you're not paying tax on it? In that case I am so glad we have these rules that stop people doubly fiddling the system. What makes you think you deserve it?

HappyMummyOfOne · 13/02/2012 13:13

If its not being done officially then its likely you wont qualify. He needs to be registered for tax purposes, have a proper tennancy agreement and deposit scheme and we doing the legal landlord checks.

Original poster

mama2moo · 13/02/2012 19:41

It hasnt been declared. I live in his house and pay him rent each month. It just hasnt been officially IYSWIM.

OP posts:

AThingInYourLife · 13/02/2012 20:01

You surely don't expect "unofficial" rent to be subsidised with public money?

hermionestranger · 13/02/2012 20:04

Do you mean that he hasn't been declaring it to HMRC?

GoldenGreen · 13/02/2012 20:06

It's usually possible where it is clear that your brother would have another tenant in place if you weren't there - ie if he is normally landlord with a house to rent. But I think you will have a hard time proving this under the circs you describe. Ask for a full written explanation from the council.

QueenOfFeckingEverything · 13/02/2012 20:07

You can get HB in some circs. When I was still with ex, he rented a house from his mother and claimed HB for it.

GoldenGreen · 13/02/2012 20:07

Would he evict you and put another tenant in if you couldn't pay? That is a key thing they will want to know.

RandomMess · 13/02/2012 22:40

Well your brother has a choice either do it officially or you will have to move.

Original poster

mama2moo · 14/02/2012 21:01

He hasnt been declaring it which I am not happy about. I am going to have a chat with him and if he doesnt declare it then I will ask for a rent reduction!!

It has something to do with the mortgage he took out. It was 110% (back in the days when they offered that) and you have to earn more then a certain % to rent it out??? I will have a word and see what he says.

I wont be looking for any housing benefit until he sorts it out.

Thanks all.

OP posts:

RandomMess · 14/02/2012 21:03

Yes you need the permission of your mortgage lender to rent out the property as usual for a but to let property you may a higher percentage even it were originally our family home

PigletJohn · 15/02/2012 20:19

I wonder if it would fit in the "rent a room" scheme?

An0therName · 15/02/2012 21:00

I wouldn't have thought so piglet unless he is living there -
mama - how you pay your rent - for your purposes if you can prove you are paying it and have been that would be a start
your brother should get it sorted thought - many mortage providers are very flexiable these days -I rent my house out and there was an admin charge and that was it.
there is also an insurance issues - his buildings insurance is potentially invalid, plus tax issues - do you have contents insurance BTW

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