single mum unemployed and owning a house

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Agis
Agis Posts: 8 Forumite
in Benefits & tax credits
Hi,

Starting from May I will be unemployed as I have received my notice.
It was not planned (as it is usually the case) and I am not prepared for this episode in my life.
I need some help to understand if I can get any financial support at all due to the fact I own the house.
I relocated 9 months ago for a new job. I moved out from my house in order to rent a new place in the area of my new job. As I have the mortgage I am renting it out.
When filling up the EntitledTo calculator I can see that I would not be able to get any support due to the above. Just to add I have been in work for over 6 years and I have 2 children age 9 and 4. Would it be better if I return to my old house?What are the other alternatives to the universal credit I am not entitled to due to the capital? Is there another way of looking at it?
Could you please share with me your experiences and some tips?
Thank you,

Agata
«13

Comments

  • marliepanda
    marliepanda Posts: 7,186 Forumite
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    It would most likely be better to move back to your old property, as I am guessing the relocation is no longer needed.

    Owning a property you dont live in is never going to be of use when on benefits, you wont get housing help and they may even use the rental income towards your income calculations.

    Move back and look for a job closer to home, you may even get some help with your mortgage interest but theres quite a long waiting period on that now.
  • rockingbilly
    rockingbilly Posts: 853 Forumite
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    marliepanda wrote: »
    ........ you may even get some help with your mortgage interest but there's quite a long waiting period on that now.

    A claimant under pension age is expected to maintain the mortgage for 9 months before they can claim any relief. Presumably the OP has an insurance policy to cover such eventualities?
  • pmlindyloo
    pmlindyloo Posts: 13,049 Forumite
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    Since you have been working then you will be able to claim contribution based JSA which is not means tested.

    However, if you then wish to claim Housing Benefit and council tax reduction these benefits are means tested so your second property would be counted.

    I believe that your second property would be counted as both capital and income. I believe that your second property would be valued by the council's own valuation officer and then the outstanding mortgage deducted to give you the capital value of your second property.

    As regards the rental income then I believe that income would be assessed as the rent minus the mortgage payment (however am not sure about this and can't find the legislation)

    You may wish to get some advice from CAB about this to go through your options.

    Although you could move back this may not be possible for some time if your tenants have a fixed term tenancy, you have to go to court to evict them etc etc. Also, of course there is the disruption to your children's schooling etc

    You could decide to sell the property - there may be a disregard of the capital for a period if you go down this route but not the rental income.

    And, finally you may quickly get another job - let's hope so.

    Please go and seek some professional advice so that you are in a better position to make decisions.

    Good luck.
  • Agis
    Agis Posts: 8 Forumite
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    Thank you all for the posts and advice.
    I would like to stay where I am due to the fact that the dad of my children leaves locally and if I move back to my house the contact will be much more difficult. I like very much over here too (South Wales).I hope to find a job locally but I expect it might be tricky cos I am quite specialised.

    I need to talk to somebody who will discuss my situation in detail so that I can take grounded decisions.

    If somebody could recommend somebody it would help.

    Otherwise I can see how it goes next 2 months and what kind of benefits I could get... I still have the mortgage to pay so the rent goes there - I need to pay for my rent over here too so owning a house is in reality not giving me any income.

    Are you saying that if I live in my house I could be better off? I would need to give 2 months notice to my tenants though...

    Thank you for responding...
  • lovinituk
    lovinituk Posts: 5,711 Forumite
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    How long have the tenants been in your house and what fixed term rental agreement are they on?
  • TELLIT01
    TELLIT01 Posts: 16,485 Forumite
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    Agis wrote: »
    I need to talk to somebody who will discuss my situation in detail so that I can take grounded decisions.

    If somebody could recommend somebody it would help.

    Are you saying that if I live in my house I could be better off? I would need to give 2 months notice to my tenants though...

    Thank you for responding...

    You should speak to CAB to see what help and advise they can give.,

    To the question of if you'd be better off living in your own house - If you lived in your own house it wouldn't be considered as capital, which it is if you aren't living there. It would make access to Income Related benefits much more straight forward.
    It's not a simple decision though. You say your ex partner lives near to you currently so possibly has input to childcare. That would be lost if you moved, and there would be a potential financial impact.
  • teddysmum
    teddysmum Posts: 9,471 Forumite
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    The big problem may be removing the tenants (cost and time), as even if their agree time is up, they can refuse to move, as advised by organisations helping those who face being homeless.
  • Mojisola
    Mojisola Posts: 35,557 Forumite
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    Agis wrote: »
    I relocated 9 months ago for a new job. I moved out from my house in order to rent a new place in the area of my new job. As I have the mortgage I am renting it out.
    Agis wrote: »
    I would like to stay where I am due to the fact that the dad of my children leaves locally and if I move back to my house the contact will be much more difficult.

    If you want to stay in new area, you'll have to consider selling the house you own.
  • Loz01
    Loz01 Posts: 1,848 Forumite
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    If you don't want to move back, can't you give the tenants notice to leave and sell your house? You could then buy something in the new area.
  • Housing_Benefit_Officer
    Housing_Benefit_Officer Posts: 2,502 Forumite
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    How much is the house worth and how much is the outstanding mortgage?

    Value of property minus outstanding mortgage = capital.

    How much is the rent and how much is the mortgage payments?

    Rental income minus mortgage payment = income.
    These are my own views and you should seek advice from your local Benefits Department or CAB.
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