property owner and housing benefit

vickyh_2

Dear All

I know there is so much expertise on these boards, I'm sure someone will know the answer to this.
I'm sorry this is a bit of a long story.

My northern rock mortgage was due to soar on 1st sept. and as the only potential buyer I had needed to sell thier flat in order to buy my house I agreed to buy thier flat to facilitate the sale.
The flat is up umpteem flights of stairs and has two bedrooms which is ok, but it means that I share with my little 4 yr old daughter and my 18yr old son (who decided at the last minute that he didn't want to go to university) has the other bedroom.
I still have a big mortgage and money is very tight because I lost my maintenance payments and my tax credits (for him) when my son reached 18 (July).
My question is, if I rent out my flat and rent somewhere more suitable, would I be entitled to Housing Benefit? The rent for this flat would have to go towards the mortgage. I am a single mum and get tax credits, my little girl (who is adopted) gets DLA. We struggle with the stairs here, and it is unsuitable for a family, but it was still the best option for me at the time. It is a huge relief to be out of my previous house, even though we are now living in a shoe-box - it's cosy!
Any advice would be very gratefully received.
Many thanks
Vickyh

Fran

The quick answer is no, you wouldn't get Housing Benefit in that situation, sorry no time to look up details.

foxxymynx

No, because you would have a property that you owned - and you don't get HB for a property that you own. Other than that, the rent income will be seen as a business income.

Oldernotwiser

Isn't your son working and contributing?

Tipples

One of two things could happen:

income from rent will be classed as unearned income for benefit purposes

or

the value of the property you own (minus the mortgage outstanding) and then minus 10% of the remaining value - whatever is left could be counted as capital.

I usually deal with over 60s benefits, so apologies for the vagueness.

Charlotte

real1314

The correct answer is that you might be able the get HB for a property you rented whilst you rent out your own flat to someone else.
The income from the flat, the mortgage and the value of the flat would all be complications, and it might even depend on how you wrap it all up.

However, whilst it is possible, it's rarely a sensible thing to do.

For one thing, if the rent doesn't meet the mortgage, where are you going to find the cash to pay the rest of it? Have you ever let a property before? Can you cope with the rules, the tenants needs and questions, the uncertainty of getting your rent?

For another thing, do you have any other income apart from tax credits, as these would affect HB. Are you working?
What rate/type of DLA do you get for your daughter?
If your son has decided not to go to Uni, what does he plan to do? Is he going to sign on or get a job?

vickyh_2

Thank you so much for all your contributions.

In answer to some of your queries:

Yes, I have rented out properties before (both on assured shorthold tennancys and holiday lets) but I have never personally rented before.

My daughter gets DLA at the higher rate.

I do marking at home for an up country uni. to supplement my income.

I could rent my house out for enough to cover the mortgage.

I could rent somwhere more suitable for us for less than my mortgage.

My son was due to start uni on 3rd Oct, so it's early days. However, he now has application forms in for all the usual places on the run up for Christmas, and there's a small chance that the place where he works every summer will give him more work as it looks like one of thier full timers are leaving, but at this moment in time he isn't working. Even if he works full time he wouldn't be able to afford to rent somewhere of his own. Rents are very expensive here - the price we pay for living in such a lovely part of the world. As it's our home and we've all lived here all our lives, moving up country isn't what we want to do.

It would have been better for us if we could have rented somewhere more suitable for us, but it would seem that while I still have some equity in my property I wouldn't be able to rent elsewhere and claim HB, but if I slip into negative equity it might do. In the mean time we will have to just snug down I think. We do have a space issue (one living rm/kitchen and only 2 bedrooms), and an access issue (3 flights of stairs with a disabled child!) but I know there are many worse off than ourselves.

Many thanks again for the advice.

Vickyh

Oldernotwiser

vickyh wrote: »

Thank you so much for all your contributions.

In answer to some of your queries:

Yes, I have rented out properties before (both on assured shorthold tennancys and holiday lets) but I have never personally rented before.

My daughter gets DLA at the higher rate.

I do marking at home for an up country uni. to supplement my income.

I could rent my house out for enough to cover the mortgage.

I could rent somwhere more suitable for us for less than my mortgage.

My son was due to start uni on 3rd Oct, so it's early days. However, he now has application forms in for all the usual places on the run up for Christmas, and there's a small chance that the place where he works every summer will give him more work as it looks like one of thier full timers are leaving, but at this moment in time he isn't working. Even if he works full time he wouldn't be able to afford to rent somewhere of his own. Rents are very expensive here - the price we pay for living in such a lovely part of the world. As it's our home and we've all lived here all our lives, moving up country isn't what we want to do.

It would have been better for us if we could have rented somewhere more suitable for us, but it would seem that while I still have some equity in my property I wouldn't be able to rent elsewhere and claim HB, but if I slip into negative equity it might do. In the mean time we will have to just snug down I think. We do have a space issue (one living rm/kitchen and only 2 bedrooms), and an access issue (3 flights of stairs with a disabled child!) but I know there are many worse off than ourselves.

Many thanks again for the advice.

Vickyh

Your son could be claiming JSA which would enable him to contribute. I don't think anyone was suggesting that he should leave home, just that he needs to play some part in the running of the household and not be a dependent any more.

vickyh_2

Well, jobs, it seems, are like buses, and it now looks like my boy will have two options! Yippee. He got a call today offering him work up till the new year in a high street retailer, and he also found out today that where he works on saturdays and in the holidays are losing a staff member, so he thinks they will offer him more work too!
He will only be on the minimum wage in both places, but wages are notoriously low here anyway.

Exciting eh?

Vickyh