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ESA and housing costs
I have a very vulnerable client (chronic anxiety/mh issues) who used to own 2 properties, one of which she rented out, the other she lived in.
The rental one has a “buy to let ” mortgage on it, and it is interest only at £140 a month
She became very ill, couldnt cope, and sold the property she lived in at a loss and moved into the buy to let one.
The Building society are aware of this however arent too happy about her living there (whatever that means : she has nowhere else to live)
Anyway : She was entitled to IRESA last year but the DWP missed her EDP. Sorting IRESA backdate now
I have told her I will get an MI12 and get help with her housing costs, and try to backdate it also but she is being incredibly skittish, as her housing costs are £200 a month but her interest liability is only £140. She is paying mortgage from her DLA
Due to her fragile mental health she is absolutely petrified (and i mean petrified) of getting into “trouble” with her building society about this and i dont want her to come to any (self) harm.
So : Can anyone see the DWP having an issue with awarding housing costs on a buy to let mortgage, and has anyone had any experience of Building societies causing problems here with this type of arrangement?
They already know she lives there anyway so i dont see their problem. I advised she renegotiate the terms of her mortgage, but as she isnt working they wont talk to her.
Any pointers would be gratefully appreciated
Thanks
You will need to establish the precise terms of the Buy to Let mortgage. Most BTL lenders require that the property is let on an assured shorthold tenancy of up to 36 months. Most also have a clause which excludes occupancy by a close relative of the landlord, and there may be other restrictive clauses.
I would suggest that somebody gently reminds the lender of their responsibilities under Part of Mortgage Code of Business and in particular the requirement to treat customers fairly.