JSA (IB) refused - Rental income too much, yet no money to live on! Advice welcomed.

Oldernotwiser

KoalaElf wrote: »

Not really. The house is only really a 2bed house, I am letting out the box room and the dining room to house 4 of us. If five of us were here [which sometimes increases to more when people have their partners over to stay] then we would only have a tiny kitchen and one bathroom. I would also come under scrutiny from the local coucil for haveing what classes as an HMO I believe.

Sorry, someone mentioned a 4 bed house before but obviously not suitable in this situation.

Oldernotwiser

KoalaElf wrote: »

I suspect this Tattie girl let things get on top of her a little which would explain her attitude to suggestions about using her art skills. Art is a lonely discipline and you get very little support outside of your own personal motivation in my experience - it is easy to get jaded and feel like it is a fruitless occupation or you have no skill at it and so on.

Quite the opposite in our Tattie's case, I'm afraid. She said several times that she wasn't going to "prostitute" her art by making money from it! Many of us felt that she needed a good slap!

KoalaElf

Oldernotwiser wrote: »

Sorry, someone mentioned a 4 bed house before but obviously not suitable in this situation.

no worries - its a good idea. i've thought whether I could resort to extreme measures such as living in the loft or shed in order to let my room out, but I have no space in them really - plus it would be freezing.

KoalaElf

Oldernotwiser wrote: »

Quite the opposite in our Tattie's case, I'm afraid. She said several times that she wasn't going to "prostitute" her art by making money from it! Many of us felt that she needed a good slap!

Goodness me! Yes she does need a good slap!

Making money from your work is not selling out... thats the kind of notion I had when I was 15 and was caught up in the romantic notion of a starving artist slaving away in a garret somewhere working *only* for the love of his/her art.

Absolute nonsense. You make what you can out of what you have in this world. If someone will pay for something because they appreciate or benefit from it in some way - you grab the opportunity with both hands [within reason and the law anyway!]

Thanks for your suggestions anyhow

Conor_3

dmg24 wrote: »

NOT ACCEPTABLE. Why is this kind of abuse allowed to continue?

I could say the same about Briona and the other people who automatically reply to every post I make with abuse, regardless of its content but I don't.

I believe that her reply started with:

Oh look it's Conor with yet another blunt and ill-thought out response! :mad:

Perhaps I should complain about that completely unwarranted remark, eh?

People in glass houses...

Conor_3

KoalaElf wrote: »

Not really. The house is only really a 2bed house, I am letting out the box room and the dining room to house 4 of us. If five of us were here [which sometimes increases to more when people have their partners over to stay] then we would only have a tiny kitchen and one bathroom. I would also come under scrutiny from the local coucil for haveing what classes as an HMO I believe.

Have you checked to see whether you have to comply with the rules for fire regs etc? If it becomes a HMO, you end up in a world of grief for stuff like that. It could be that it is already classed as a HMO under your councils rules as each council seems to have a different take on it.

What about putting up the rent, is that an option?

KoalaElf

Conor wrote: »

Have you checked to see whether you have to comply with the rules for fire regs etc? If it becomes a HMO, you end up in a world of grief for stuff like that. It could be that it is already classed as a HMO under your councils rules as each council seems to have a different take on it.

What about putting up the rent, is that an option?

I believe I have all the safety stuff under control. I have smoke detectors that I check every couple of weeks, fire extinguishers, fire blanket in the kitchen, a carbon monoxide detector, and I get a Gas Safety certificate every year.

I think it only classes as an HMO in my area if there are 5 or more people from diff households living in the same house, and/or the property is over 3 floors. If it gets classed as an HMO then I remember from looking at the regs that some of the requirements seemed quite extreme. There was one thing that said that everyone had to have a washbasin in their room?!

Even if that turned out not to be a requirement, I remember that it meant I couldn't let out my box room due to it not having enough square footage. This seems silly to me since there are many people who only need enough space for a bed, chest of drawers and a couple of possessions and are quite happy to pay a much smaller rent for it! I nearly bought a house that was over 3 floors until I realised all the expensive modifications I would need to do to make it legal! [i'm not one for crossing my fingers and hoping they won't find out...] Don't get me wrong, I am in favour of poor accomodation and bad landlords being sorted out, but it was a minefield I knew I didnt want to get into.

Rental increase is a non option as I have already stated. I am already at the top of what I can charge realistically - and I can only do that since its a really nice house to live in.

beccam

Just thinking if you are willing to 'prostitute' you art !
Can you copy pics of cartoon caractures etc? Or do some simple drawing/paintings to sell on ebay? I've bought some things for my daughters bedroom and it might cost a wee bit initially to get paints etc but you could soon make a profit.
http://cgi.ebay.co.uk/Artist-painted-PEPPA-PIG-GEORGE-DINOSAUR-canvas-pp1_W0QQitemZ110319683244QQcmdZViewItemQQptZUK_HG_ChildFurniture_RL?hash=item110319683244&_trksid=p3286.c0.m14&_trkparms=72%3A1301%7C66%3A2%7C65%3A12%7C39%3A1%7C240%3A1318
Not sure if I can post that link or not but too late now!! This is the sort of thing I mean or this..
http://cgi.ebay.co.uk/3-MODERN-CANVAS-PAINTINGS-SHADES-OF-BLUE-CIRCLES-30cm_W0QQitemZ360111770068QQcmdZViewItemQQptZUK_Artists_Self_Representing_Digital_Art_New_Media_ET?hash=item360111770068&_trksid=p3286.c0.m14&_trkparms=72%3A1294%7C66%3A2%7C65%3A12%7C39%3A1%7C240%3A1318
Just ideas...I've been selling daughters old clothes on ebay and it all adds up even if things only sell for a few pounds at a time.

real1314

KoalaElf wrote: »

@ real1314

I am not making the scenario up. What is odd about having a 40% deposit with a 60% mortgage? The lenders are usually much happier to lend with a larger deposit...

I have had the property for just over 2 years [I bought during the summer of 2006 just before I went into my 2nd year at Uni]. I arranged a fixed rate mortgage at 4.29% for 2 years back then. Hence the fixed rate cam up for renewal at the end of Aug 2008.

I was only offered a BTL mortgage, don't ask me why - that's all the lenders would offer me. As for the income issue - yes I would not be able to prove I have sufficient income, which is why the mortgage has my father acting as a guarantor [he would rather have me invest my inheritance into a roof over my head than spend it on renting for the foreseeable future]

In answer to your questions:
The mortgage is for £150000.
I have a deposit of £100000.
The monthly interest is about £835ish.
I have three 'lodgers' who all together pay £1120 [all inclusive of bills]
I have no other income.
It is a BTL mortgage.
Technically I need to be paying £580 into a repayment vehicle in order to be in a position to repay my mortgage in 15 years [that is all they would give me since my father is 65], which up until recently I have been doing. Of course, currently I am not breaking even on my interest payments and bills, so I have to forget about the repayments for now and hope I see happier times ahead.

Fair do's, I thought it may have been invented as it's often the case that people wh invent things forget what they've invented and then change their story.
I still think it's a bit odd that you've been allowed a BTL on a property that is primarily residential, but that's probably typical of some lenders.
Regardless fo the BTL mortgage and your view of it as a business, I suspect the DWP would regard your property as a residential property with lodgers. I think most people would view a mnormal residential house being let out this way as the same too. Setting part of it up a business to get a tax break may have been a "clever" idea from one side, but the DWP are well within their rights to disagree.
So, they will not allow any of the mortgage as an expense and will allow (iirc) the first £20 off each lodger and then half of the rest per week.
Based on the 3 paying an equal amount of £86 a week, that means £20 off = £66 then half the rest leaves £33 per week per lodger, giving £99 a week income which stops you getting any benefit.

To be honest, you've set up a situation that you haven't thought through.

KoalaElf

real1314 wrote: »

To be honest, you've set up a situation that you haven't thought through.

Yes it would be correct to say I have not thought through this particular scenario. I thought through the possibility that house prices could go down - hence why I have a decent deposit, so I can do my best to avoid negative equity. That is more foresight than some manage. I have thought through many other common pitfalls that other landlords do not.

I have to say though - at the point that I took out this mortgage, I had no reason to believe that I might not be able to get a minimum wage job that could pay me the £60p/w that i need to survive. I have not once before in my life had trouble getting a minimum wage job, and now older, and with a degree, I am suddenly having immense difficulty, despite the frustration of witnessing everyday; employed people seemingly incapable of doing a good job. I sometimes want to shake them out of their reverie of boredom and yell at them to be glad that they have this job and to do it well otherwise tomorrow it could be them in my shoes.

Anyway - back to more neutral ground : I do not feel I was in a position to predict this, nor should every possibility of something going wrong stop you from taking doing anything in life. At the time it was a reasonably calculated risk, and as I see it I have fallen foul of probability. If I could go back in time and change this - then believe me I would.

I think maybe you need to try and see the best in people a little more rather than trying to trip someone up about their story on a whim that they might be making it up. If indeed I had gone to the trouble of making all that up, then I think I would have had the nous to read back over what I had written and make sure my story added up, although why anyone would *bother* with the hassle of all that perplexes me. I assume there are people who do that on this forum? Or are you naturally suspicious of peoples intentions?

As for your explanations re. what the DWP deduce about my income, you are essentially telling me exactly what they have said although they calculate my weekly income to be £221 p/w. I have no idea how they arrived at that number, but here the mysterious workings of the DWP prevail and no one I speak to there will explain it. I guess they think if you know too much you will find a way to 'work' the system.

Let me know if you have any helpful info to help me out of this situation. I will be acting on the suggestions mentioned by others, and i'm sure your input would be useful.