Can he gift me a percentage of the property?

I am helping a friend to buy his flat from the council under the right to buy act - as he has no means to acquire a mortgage and I have the cash to pay for it outright. The idea is to then rent the flat out and the rent will be paid back to me, and I will declare the income myself. Shall I have a solicitor draw a personal mortgage, or can he gift me a percentage of the property, so that I can collect the rent?

From your perspective you are best off drawing up legal documents showing that you have a charge on the property for the amount of the loan. Additionally you should arrange that you own a small percentage of the property, even 1% will do. Then you can draw up a written agreement between you that even though you only own 1% of the house, nevertheless you will be entitled to and receiving, let's say, 100% of the rental income - see www.hmrc.gov.uk/manuals/pimmanual/PIM1030.htm.