Change of circumstances

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    Change of circumstances

    Hello, I am hoping you fine people can help with a query.

    I have recently taken the plunge and bought a buy to let. It needs some works doing on it which should take about 5 months- I have planned for this in my calculations and the IO MTG is very manageable at under £200 per month. I bought well under Market Value and by spending a small amount have already seen the value increase 30%.

    My query is my parents have had a change of circumstances and will have no-where to live next year due to their current home being tied to employment- whilst the intention was never to let to them- can I do this? I would only charge them the MTG amount or 125% ? Do I have to let the MTG comp know? I will not be making a profit obviously- what Tax Implications will that cause?
    Sorry for all the questions...I have searched most topics but cant find anything with these circumstances.

    Thanks
    MsVerSus


    #2
    Check the mortgage terms and conditions as I'm guessing that they will stipulate that you cannot rent the property to family.
    "I'm afraid I didn't do enough background checks apart from checking her identity on Facebook" - ANON

    What I say is based on my own experience and research - Please don't take as gospel without first checking the gospel yourself.

    Comment


      #3
      Renting to family is not advisable anyway. Far better to let it on the open market and support them with their own rent payments if they need your help.

      Comment


        #4
        As usual it seems I have the opposite view - if it were to be allowed by the mortgage company I would certainly let to them. You would follow the usual rules for tax. The only risk is that you fall out. Only you can judge whether that is likely to happen. In those circumstances letting to family would become an utter nightmare.
        Unshackled by the chains of idle vanity, A modest manatee, that's me

        Comment


          #5
          If your parents need to rely on housing benefit to help pay the rent either now or in the future, you could have a problem as you would have to persuade the benefits office that this was not just a sham tenancy.

          Comment


            #6
            Yes I agree - I did not mean move them in on HB but only if they are paying from their own pockets.
            Unshackled by the chains of idle vanity, A modest manatee, that's me

            Comment


              #7
              Thank you all for your comments- it would not be on any benefits. My relationship with my parents is fantastic- if it was brother or sister I wouldn't even consider it! MTG Comp is fine with it. I made some non committal enquiries. I am short term letting in the meantime. Again thank you for your comments.

              Comment


                #8
                Your relationship with parents is great so don't ruin it by becoming their landlord. Anything could happen to the property and it's not worth the aggro if it happens to go base over apex.

                Comment

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