can i claim housing benefit on a part ownership housing

jenny_vidler

My x father inlaw has offered to help me buy a house on a part buy part rent option for myself and my two children ...I am currently renting a flat privately and claiming housing allaowance as i am at uni, would i still be able to claim housing allowance on the rent part...I am so sick of having to move on to the next home when landlords decide to sell...I just want stability for my children...Please help

dmg24

If you are paying rent to a HA, you could claim LHA.

If you are paying rent to your FIL, it would be very unlikely.

lynzpower

Im not 100% but Im fairly sure you used to be able to.

I used to have a shared ownership flat, and when I became unwell, I was signed off work sick with reducing salary. The DWP said I could have claimed for HB for this- HOWEVER, this was after the event ( thanks for that DWP!) and I never got a straight answer at the time, I guess SO was really a new thing then (04-06)

HOWEVER, housing benefit has changed and is now Local Housing Allowance, so the rules may have changed

Whats more important about Shared ownership housing, is that It seems that a condition of the leases of these SO is that the mortgagee needs to live at the property. Certainly this was definately a condition when I bought my SO flat.

This is to stop potential property magnates buying up these SO flats and renting them out. An example of this is that my flat "share" that I mortgaged was 79k, but buying an eqiavlent flat on the same road NOT shared ownership would have been about 320k ( go figure!) to rent would have easily got 450 a week. When I came to sell, the guy who offered the most was no going to live at the property ( buying it for his sister- apparently :rolleyes:) & because he wasnt living there, thius almost shelved the whole process.

However HAs might be becoming a bit less choosy on this, they have a lot of properties they need to shift, certainly in London. I guess the golden rule is that you have to ask the questions direct to them

Where do you live

jenny_vidler

I live in Colchester...He is willing to give me around 70 grand, Lucky me... Should be enough to pay 50% ish...

lynzpower

dmg24 wrote: »

If you are paying rent to a HA, you could claim LHA.

If you are paying rent to your FIL, it would be very unlikely.

This is a really good point, and really illustrates the difficulty of this.

Your FIL will have to be the mortgagee, and therefore for the methods of collection of the unpaid rent ( possilbe) then they Housing association can put a charge on the mortgage.

EXAMPLE: As I said above, my pay decreased, and therefore something had to give. I refused to stop paying the mortgage, and chose- trying to minimise damage- did not pay a payment of rent for 2 motnhs ( around 450 in total) with a view Id get back on my feet soon to sort it out. Then the HA wrote to my lender and the lender took the debts off the HA and added it to my mortgage- and gave me 2x letters at 35.00 a go. YOU CAN HAVE YOUR SO REPOSSESSED IF YOU DONT PAY THE RENT, REGARDLESS HOW MUCH IS PAID IN CASH./ EQUITY. Sorry for shouting but not many people know this.

If your dad is the mortgagee, then the rent has to also be billed to him .Therefore there will be a real issue here I think, LHA wont pay rent to a relative, although there is a possibility if he is ex FIL - does he have a different name etc? Still think this scenario is riddled with problems.

To be fair Ive just had a gander on RM and for just north of 80k theres some pretty good properties on there, Im not sure of course on areas, where you are etc. With a bit of shopping around paying 100% cash surely you could get something outright- might not be a huge gaff, but that would be outright.??

Macro_3

Housing benefit can be paid on the rent side of a genuine shared ownership property. However, your set-up does not sound like a genuine shared ownership. Has your fil looked into the legalities of setting up a shared ownership trust and will your mortgage be a shared ownership mortgage etc? Or will he just 'give' you his 70k and you fund the rest with a standard mortgage?

To be honest, I think that unless the property is genuinely S.O. the tenancy would be viewed as contrived. His stake in the property may be viewed more as a joint owner and the equity he placed in it more as a loan

Macro_3

Just re-read your original post. If you are saying that he is willing to give you 70k to buy your half of a genuine SO property, so you would own half paid for by the 70k gift and a social landlord would rent the other half to you, then that would be fine. Housing benefit could be paid on the rent.

emms1981

I think you will find that you can't be given 70k without paying aload of tax on it am I wrong?

dmg24

**Before anybody takes the time to reply - the original post is a year old (almost to the day!)**

theartfullodger

**Before anybody takes the time to reply - the original post is a year old (almost to the day!)**

Isn't that a bit time-ist (or date-ist??)????

Cheers!

Lodger