If you own a house can you....

[Thingsareontheup]

Rent it out to a tenant and then move into private rented accommodation whilst claiming housing benefit towards the rent? Only me and my friend was chatting last night and she said that she can no longer afford the mortgage now that her partner has left he so she needs to move somewhere cheaper. She can't afford to sell the house as it's in negative equity so renting somewhere cheaper and getting a tenant in her house is her only option. But is this allowed, I mean I didn't think you could get housing benefit if you own another property and not if you have a tenant, or do i have it wrong?

Anyone?

Nobodies I'm afraid - I'm sure someone will be along in a minute who does! But if it's not an option could she take in a lodger to help pay the mortgage?

No idea not nobodies - autocorrect!

not sure on the hb situation but unless the house is a mansion and the rental a small flat, the finances won't work. She also needs to learn the business of being a landlord, have all the insurances, be on call to fix things, remove all her stuff, etc etc etc.

she's going to have to sell and then deal with the debt as it comes. Sorry. Also not sure that partner can just walk away from his share of the debt?

Her partner just upped and left her and her two kids and she hasn't seen or heard from him in 5 months so she can't chase him for the money. She's willing to take on the role as landlord and asking as her mortgage or most of her mortgage is paid then she's happy.

but the rent would be her income so no she wouldn't get hb. Is the house in her name only?

In the short term being a landlord costs money. Insurance, repairs, agency fees, boiler checks, elect safety certificates, changeover periods when house is vacant. If the house is in neg equity does she even know that rent would cover mortgage payments? No idea about housing benefit, but I would have thought rent would count as income. She'd gave to declare it as income to HMRC.

I think she would be expected to sell the house. She would be able to claim hb for a period of time whilst selling the property but would be expected to prove that it was being actively marketed. Any equity would then be accounted for as a lump sum.

The rent would most likely take her over the Hb threshold but it could work. If she can get a lot more in rent for her place than she spends on her home. E.g. Renting out a 3-4 bed house with garden and living in a 2bed flat.

The house we have just bought was rented out by the previous owners after their divorce to cover their separate living costs.

Sorry I just realised the bit about negative equity. She needs to speak to her mortgage company and hb dept . All local authorities interpret the rules slightly differently.

why doesn't she get a lodger under the rent a room scheme ?
Nearly £5k a year towards the cost of the house tax free?

The finances definitely don't add up. Fees to a letting agent will soak up the first month's rent. Add a BTL mortgage, LLs' insurance, having a gas certificate done, etc...., and she can't afford it.

It's not fair letting to someone if she can't afford to do her legal duty and fix things which break (washing machine, plumbing- all expensive, yet urgent repairs!)

Sorry she's been left in the lurch like this, but having a lodger is a much more affordable solution, which will be fairer on all parties (apart from the disappeared ex, who hopefully won't get away with this forever)

She might be eligible for support for mortgage interest depending on her situation?

www.gov.uk/support-for-mortgage-interest/overview