Renting to family members and housing benefit

[Dip0]

Hello

I had some advice about this a number of years ago from the solicitor who did the sale which I thought may have been incorrect. They said that to stay off the council's radar we must never rent the property to each other ever because we are close family and I bought it off them.

In 2016 my parents gifted me 200k to take out a mortgage to buy the London house we all lived in and out it in my name only. It was sold to me at market value (360k). The mortgage was residential and we all continued living there as before.

Last month due to buying another house, this original house has been legally remortgaged under LTB (let to buy) and the hope is that my parents who are now pensioners can rent it from me (I am moving out and bought another property I now live in) via Housing Benefit only in order to pay for the remortgage.

I understand that under normal circumstances this is completely OK and legal.

My parents still think of the original solicitor's words and do not wish to do this (not out of principle but due to the prevois warning). They said if I can get other solicitors or learned members to say otherwise they'd consider it, but they want to stay out of legal trouble.

Please could I have advice on this situation and whether my plan would be legal and not cause problems with the council or hmrc?

Thank you in advance!

 

[Longterminvestor]

I read somewhere that some buy to let mortgages have conditions which specify how and when you can rent out the property to family. Is this something you have come across before?

As for the issue with the council I know they have first refusal if you wish to sell the property for a period of time but other than that I'm not sure they will be able to step in and stop you from renting it to your parents.