Dear Kazlou,
When my Mum went into a Care Home, we let her house to tenants for over two years. We had to have some work done on the house, in order to prepare it for letting and this can be offset against tax. Rental income needs to be declared to the Inland Revenue, showing the amount left after necessary expenses have been deducted.
If your mother's income after pensions, savings and rent is more than her personal allowance, then she may have to pay income tax. It would be a good idea to ask for advice from a good, well established letting agency about preparing the flat for letting and there may be restrictions on who can become a tenant, if it is a warden assisted property.
We were very lucky with our experiences of letting, but there could be a lot of potential problems which need to be investigated and sorted out first.
Although we were able to obtain a high rent for Mum's house, we did find that by the time we'd paid out insurance, maintenance agreements and various repairs, we were not really making a good return on the property. We sold the house in the summer and it has taken a lot of worrying away.
Good luck!
Kayla