Can I mortgage house to help DD

Have been a landlord for quite a while now and have never been required to do a legionnaires test! Gas safety checks are required and new legislation is bring in a compulsory electrical safety check which will cover the wiring etc plus any electrical goods provided by the landlord

Old gimmer would she lose her housing benefits anyway if she was given £75K?
Not sure what your what if’s are. Seems to me that there will be some no matter what route is taken.

I think you need a lawyer to advise you about this.

If you only have the one child, it might be possible to lend her the money needed as an advance on her inheritance.

Could've almost written your post PamelaJ1 except our son and his partner did actually split up.

Loobyloo12 some lenders don't allow renting to family members. But I believe some do. We've had several mortgage lenders since we purchased our property and the rules varied.

Imm6 in your shoes my first stop would be an appointment with a financial advisor who specialises in mortgages.

Had one thought - many buy-to-let mortgages are granted on the condition that you don't rent it out to a relative (so do check if that's the direction you're going in). But I strongly feel that you need legal advice (even if you have to pay for it). This could go horribly wrong without it.

Its not a buy to let its equity release.

Why not look into guarentor mortgages instead. She can get a 100% mortgage if are guarentor?

I am btl LL and generally most mortgage companies now insist the rent covers 140% of the rent due to new stress test government make them do. I have never found a mortgage company that would allow you to let to a family member. You have to sign to say you will not do so. Most mortgage companies also insist you do not let to person on HB.

@loo and pamelaj - the DD in question is currently getting some HB as I understand.

Different situation - but food for thought.

I'm thinking of doing something similar for my DD when the time comes, although I would steer well clear of a BTL mortgage personally! Too many what ifs for my liking!

Go to a financial advisor connected to an estate agent and get the legal advice. I did this and was told I could not rent a property to a family member as a buy to let landlord. But there are ways around it. Good luck?

Only have to pay tax over £3k as inheritance tax when you die, if you are over the limit and live less than 7 years from the gift .

Remember if you gift money tax will have to be paid on it if its more than 3K in any one year.

I don't see why not however you would need proof to your lender you had the means to keep up repayments.

We have a buy to let mortgage and our daughter and ex husband ( it’s complicated!) and ourGS live in it and pay us rent. We have a legal rental agreement to protect both us and ourDD.
We have an interest only mortgage and as long as they cover our expenses and tax we are happy. Of course this doesn’t always work. We’ve just renewed the kitchen!
In this way DD is secure and we still have control over the property if anything happens to their relationship. Although everything is good at the moment, one never knows.
It also means that we don’t compromise our home.

DD wouldn't get HB on a property she owns and lives in.

She's highly unlikely to get HB to contribute to rent paid to a relative (especially her mother!) otherwise we'd all be doing it, wouldn't we?

If she lives in a house she owns, it wouldn't be an asset for the purposes of getting benefit. If she owns another house, then that's a different matter altogether.

Run the stats through a benefits checker such as entitled to or the one on the CAB website, using different scenarios.

Also - be aware that changes of circumstances are likely to trigger a claim for Universal Credit which opens a whole new can of worms.

Money Saving Expert is an excellent site for research.

I think that your idea may get your DD or you into problems with the benefits agency if she needs the HB to pay the "rent" on the house

If your DD owns the property - then she may lose her eligibility to benefits as she would have assets worth way over the maximum allowed. Also wouldn't the mortgage need to be in her name?

If you own the house and your DD pays rent - then the Benefits agency may not accept you as a landlord as usually they won't pay benefits on houses owned by family members, plus you would need to meet all of the requirements for landlords such as safety certificates and insurance

Try Family Springboard Mortgage by Barclays.

I'm confused. If you're giving DD a deposit, surely she would be the owner of the house bought using that deposit to find her own mortgage?

Are you thinking equity release to fund the £75k? If so, be very careful. Age UK is a good place for advice.

Claiming HB to benefit (pardon the pun) a family member is fraud AFAIK. Although I'm not sure where the "rent" is fitting in, unless you mean an arrangement to repay the £75?

There are "family mortgages" where a family member acts as a kind of guarantor for a first time buyer. The mortgage would be secured against the parents' home. I think Lloyds are doing one atm. Is that the type of thing you were after?

Moneysupermarket do a basic guide to what’s involved in being a landlord.

Like tartlet, I’m not sure who will own the house, you or your daughter because that will alter things considerably.

You really need some specialised advice. Don’t rely onGransnet?

ps.as long as you're paying the mortgage on time they wont care if you make any profit from it or who you rent to.Its only the benefits people who would need to know

Also. Some mortgages and insurance companies do not allow Housing benefit so make sure to ask.

When we looked into renting out our property we were informed that we would require 75% deposit.
As PP have also mentioned if you will be in receipt of her housing benefit you will be responsible for:
Landlords insurance
Gas and electric safety certificates and
Any repairs that need doing

Egllantine You really dont ,you can get Buy to lets on interest only as the property is security for itself.So if you charge the mortgage plus the required % over it the OP's daughter could feasibly afford it WITHOUT claiming HB ,The OP should speak to a reputable Mortgage broker or company and establish facts .

I was told by a FA that for buy to let mortgages lenders want you to charge 25% more for rent than the mortgage payments.

I’m a bit confused about who will own the house. The OP mentions giving her daughter a £75k deposit which suggests that her daughter would be buying the house but the expectation or hope of rent suggests that the property would be owned by the OP.

Other posters are right when they mention that a family arrangement re renting a property could cause issues with HB or the UC housing allowance. They are wary of manipulated scenarios such as you describe and might take the view that it isn’t a proper tenancy. Would you evict your daughter if she failed to pay the rent for instance?

And then there are tax and CGT implications and potentially inheritance tax issues (since a property will almost inevitably gain in value).

Lots to consider.

You’ll need a good bit more than the mortgage to cover rent.

You’ll need to cover all the safety requirements of landlords like gas certificate, PAT testing, Legionnaires testing and an increased house insurance premium.

Plus income tax on the rent of 20% minimum or more depending on your level of income.

Some Councils eg Nottingham also charge a fee to landlords, I think £700, to inspect and ensure rented properties meet a certain standard. This is on privately rented not council.

All legal landlord responsibilities will have to be met before the rental qualifies for Housing Benefit.

Also, bear in mind that if you need care in the future , the rental property will be classed as a disposable asset.