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Original poster

Buy to let - daughter will be tenant

91 replies

Twoshoesnewshoes · 30/11/2022 19:26

Has anyone done this? Officially it seems to not be allowed to rent your buy to let property to family, how do they know/check?
trying to find a way to help my daughter on the housing ladder!
TIA x

OP posts:
VanCleefArpels · 02/12/2022 10:58

beachcitygirl · 02/12/2022 09:59

Could she buy a home in a cheaper (not as nice/expensive area) for her budget, rent it out & live at home. Thus earning equity & an income from the rent?

You can’t get a BTL mortgage without also owning a property yourself so this would not be legal

IneedcoffeeinanIV · 02/12/2022 10:59

I wouldn't risk doing it without checking the mortgage lender allows Family members as tenants first because they can decline your mortgage application if it's outside of their lending policy. The underwriters would look into this. It would also cause an issue if you tried to borrow any additional funds on the mortgage later down the line because you're in contempt of your mortgage offer

IneedcoffeeinanIV · 02/12/2022 11:00

Also, some lenders offer a joint borrower/sole proprietor mortgage so that could be an option to look into. You can supply the deposit and it can be your daughter that resides in the property but the affordability ect would be based on your income as well as hers (or just yours if that's what you'd rather do)

Persipan · 02/12/2022 11:07

BadNomad · 02/12/2022 09:58

This really isn't as straight forward as you think it is. Like others have said, you will have to pay stamp duty and pay tax on the rental income.

Stamp duty on a buy-to-let is currently 3% for properties up to £125k, then 5% for £125,001 - £250,000.

You will have to pay at least 20% tax on what your daughter pays you for rent.

Plus you'll need landlord insurance etc.

This. Plus don't forget the costs of having the appropriate landlord checks in place (landlords gas safety certificate, EICR, any costs associated with getting the EPC high enough). I can absolutely understand the desire to help your daughter, but financially speaking this doesn't seem like a good route to doing that.

Itsfridaynightok · 02/12/2022 11:38

I looked into this for a family member and was told it wouldn't be a buy to let mortgage but instead a second property which made it unattainable at the time.

Could you just do it jointly ?

Original poster
Twoshoesnewshoes · 02/12/2022 12:53

Thanks, I think the btl thing is not ideal after thinking all this through. I’m going to remortgage to give her some extra.

it’s tricky, we’ve given/got saved £30k for each of our 3 DCs, one has bought a flat,- but I can’t remortgage to give more to all three, so need to work it out so it’s fair…

she works full time, she doesn’t get any benefits, she has saved a £20k deposit. She can’t live here and commute because the train fare would cost around £700 a month! Same as her rent!

OP posts:
Original poster
Twoshoesnewshoes · 02/12/2022 12:57

Also the cheapest studio in her city, a long way out from her work, is £145k. There are no properties at all for less.

OP posts:
IhearyouClemFandango · 02/12/2022 13:06

BernadetteRostankowskiWolowitz · 02/12/2022 08:07

So what happened to the 24k she saved when she did live at home?

Show quote history

The op says further up that she has it, it makes up a proportion of the £50k deposit being discussed

astronewt · 02/12/2022 13:10

She could get a room in a flat share and save more towards a deposit. That's what most young people who are starting out do. You don't need your own flat when you're young and single.

Original poster
Twoshoesnewshoes · 02/12/2022 14:06

She does have a room in a flat share!
also she is nearly 30!!

OP posts:
Original poster
Twoshoesnewshoes · 02/12/2022 14:06

It’s not possible to save significant money when paying rent and bills. That’s the reality for DD and her peers.

OP posts:
tootiredtobother · 02/12/2022 14:10

we became guarantors for our son to buy his first house under buy to let as a student. In his second year, renting the other rooms to fellow students, and years later still rented out to students, think it was with Bath Building society

VanCleefArpels · 02/12/2022 14:32

Twoshoesnewshoes · 02/12/2022 14:06

It’s not possible to save significant money when paying rent and bills. That’s the reality for DD and her peers.

The only realistic way without parental help ;or with limited help) is to buy as a couple, harsh truth for our grown up kids

Original poster
Twoshoesnewshoes · 02/12/2022 15:05

Thanks @tootiredtobother ill have a look at Bath BS

OP posts:
Geppili · 02/12/2022 17:40

My DM did this for a sibling. Make sure you update your Will. My DM didn't and it was complicated when she died suddenly.

CellophaneFlower · 02/12/2022 19:32

titchy · 30/11/2022 21:54

So she gives you her money, which you then use for a flat (wouldn't you be liable to capital gains on her 'gift' to you?). Plus CGT when you gift it to her. You'd also have to stamp duty at the second home rate.

She wouldn't have to pay stamp duty if she bought in her name and obvs no CGT liability.

Maybe she just has to buy somewhere she can afford!

Show quote history

You don't pay CGT on cash.

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