Renting my house to my grandson

I would suggest your mother appoints attorneys to be able to manage the property for her, she is 98 after all and might lose capacity to enter into legal contracts at some point. The tenants should sign an assured shorthold tenancy agreement, or they might get squatter's rights and they should pay a market rent. The rent she receives is taxable and will me taken into account for paying her care fees.

Thank you to all who have kindly responded to my request for help. We very much appreciate your combined wisdom in this matter and it has certainly answered many questions and raises others that we need to ask a Financial Adviser about. As mum is 98 she won't be wanting to start running a business (especially from a Residential home) and so we are hoping we will be able to run it on her behalf.

I rented my house out for two years via a letting agent who did not fulfill the terms. House was never inspected (hence damage was not recorded) and tenants eventually skipped owing rent and leaving £2k worth of damage. I then discovered the letter of the agent supposedly signed by the guarantor was invalid on a technicality..... ie forged.

Similar also happened about 40 years ago when another letting agent was neglectful. The only twice that I used an agent.
Sorry, I don't trust a letting agent to do the job thoroughly once a house is let.

And the money I made wasn't worth it.

Others may have better experiences of letting agents.

Sorry but I think you do need to check further on HB eligibility.
A few years back DD was in this position and my mother and I were discussing the possibility of buying a flat for her. HB would not be paid to someone living in a house owned by a relative. Fortunately she found somewhere suitable so the discussion went no further.

Maybe it would be worth using a property letting agency to deal with the legal requirements, making sure the rent is paid, etc.
You could always make enquires, anyway, on what service they offer and what they charge.

I have rented a property (not my home) to a relative who claimed Housing Benefit for it. We checked beforehand and there was no problem with it.

A friend of DDs had her housing benefit suspended when she declared she was renting a house from her x husband,even though their separation and forthcoming divorce was amicable she was not allowed to claim any benefit,her future x husband did not live at the property it was one of his Buy to Let properties.

I think the housing benefit rule only applied if the claimant was living on the owner's premises. I think it was to stop adult children claiming a rent allowance while still living at home with their parents or other close relatives. I do not think it applies when they are renting entirely separate premises from a relative.

I agree that she should be careful. Being a landlord is not a walk in the park. She needs to declare any income, get annual checks done of every gas and electric appliance, and ensure that each deposit is registered with an appropriate deposit scheme.

And, like a pp says, she should most definitely take advice on whether a relative is able to claim housing benefit (obviously this may not apply).

Please be very careful letting to relatives. I say this to anyone considering it.
Someone I know let their house to a nephew and family whilst living abroad only to discover that the nephew wasn't paying into the account set up to cover the mortgage and the owner lost the house. Causing a huge family rift.

--and would need to have an annual gas and electricity check done.

Work he and his friends do to the house can be considered as rent in kind rather than cash.

I would check with your local Citizen's Advice Bureau (CAB) or local branch of Age UK. They should have this information.

Under the new rules would she have to be registered as a landlord.

I remember being told once that if you needed to claim housing benefit you would be unable to do so if your landlord was a relative. Without knowing how secure the grandson's income is I don't know how relevant this would be (or indeed if it is still the case).

She would have to declare the rent received to the taxman. House insurance would be down to her. Contents insurance, council tax, utility bills would be down to the tenants.