Benefits and Renting a house out.

KimYeovil

Where can you buy a four or five bedroom house for £35,000?

archie9uk

cte1111 wrote: »

You would be unlikely to be able to claim IS, as any equity on the property would count towards your capital. So if the total of your savings and equity on the property was > £16,000, you would not be able to claim IS.

The equity would count as capital, and the rental income would count as income, so you may lose your Income Support and some or all of your Housing Benefit.

Look at it from the point of view of the state - if you can afford a deposit and mortgage for a property, why would you rent it out instead of live in it? (Because you couldn't claim Housing Benefit if you owned your own home...)

real1314

smanty wrote: »

I am on income support and housing benefit full. I work 10 hours a week.

I am thinking of buying a property to rent out just a cheap one. £35000 for a flat and mortgage is only £175 a month. The rental income is £350. The reason I am doing this is for my two children future investment.

How will this affect benefit? Will I still get full housing benefit?

You'd need a deposit. Have you got one?
You'd need a mortgage (assuming you haven't got £35k). Where would you get it?
The property might be determined as a capital asset, in which case you may be subject to tarriff income. Or it might be deemed a business in which case the income might affect your benefits. (can't be both capital and income though, so that bit's "good")

Give it up.

Graham_Devon

LOL, I don't even think this is a wind up. Just trying to get as much cake as possible. If you can pay for another house, you can pay for your own, instead of everyone else paying for it.

Unstoppable_2

smanty wrote: »

I am disabled myself. That is why i can only work 10 hours.

That's nice. So am I. I manage 60hr working weeks.

BTW, is that £175 a month on a private mortgage? I only ask because you would not be able to buy a property and let it out on a private mortgage and would need to get a commercial mortgage. Interest rates for commercial mortgages are around the 7% mark as they follow the LIBOR rate, not the Bank of England Base Rate, and monthly repayments would likely be more. In addition, you'd need at least £8250 as a deposit as they only lend to 75% value. If you've £8250 savings, I'm sure that the IS and HB people would be interested....

Oldernotwiser

KimYeovil wrote: »

Where can you buy a four or five bedroom house for £35,000?

The OP said "a flat". Where did you get the 4/5 bed house from?