Q I wonder if you can help. My 42-year-old son has a long-term mental health problem, schizophrenia. We want to establish him in his own home long term. He has long periods when he is well but then stops taking medication and falls into severe illness again. Then he loses his flat and has to start all over again on homeless waiting lists and is eventually rehoused. But it takes so long and his mental health is not helped by staying in hostels.
We have heard of someone who provided a flat for their brother with him making payments on benefits but cannot find out any more information. If we provide a large deposit do you think there is anyway he can move in and use his benefits to pay a mortgage or rent from us? It would come to him on my death.
I think renting from family is not permitted but I am certain an exception was made for the sister and brother I mentioned. I have a long-term partner – is he classed as family? Could my son rent from him?
A According to the housing charity Shelter, you can claim housing-related benefits if you pay rent to a relative or former partner but only if you are renting on a commercial basis.
The family member doesn’t have to be making a profit from renting to you – so it is possible to charge a lower-than-market-rate rent – but there does have to be a legally binding tenancy agreement in place and the relative does actually have to take on the rights and responsibilities of a landlord.
So buying somewhere for your son to live is an option. But rather than taking out a standard buy-to-let mortgage, a mortgage expert, Pete Mugleston of onlinemortgageadvisor.co.uk, says that you’ll need a regulated buy-to-let mortgage. “This type of mortgage allows the borrower to purchase a home to live in now or in the future, or to be let out to close family members including parents, grandparents, children or siblings but not aunts, uncles, cousins or any other extended family members,” says Mugleston.
If you think your son is up to taking on responsibility for a mortgage of his own – but with help from you – and he has an income, another option, according to Mugleston, is a guarantor mortgage ( also known as a family-assisted mortgage) where you step in if your son were unable to meet the mortgage repayments.
A third option if a family offset mortgage where parents’ savings are set against the mortgage loan thus bringing down the amount on which interest is charged. A final option is a joint application, sole proprietor mortgage which allows multiple people to make mortgage payments while a lone applicant owns the property and is named as sole owner at the Land Registry.
As far as using benefits to pay the mortgage goes, there are lenders who will take them into account but they are few and far between. Finally, because your son’s circumstances are so niche, it would be advisable to speak to a mortgage adviser who will be able to determine which of the mortgage options outlined above is best for you.