Help plz: sick & on benefit, 2nd home rental income alowance used to assess IS level

lesandflynny

Hi

I have recently found myself unable to work due to ill health after 25 years with the same company and since my health insurance ran out I am entitled to help from benefits.

The complication is that I have a 2nd home bought in the boom as an investment that is now in negative equity (so cannot sell) and I have a mortgage & service charge on it along with other fees e.g. building insurance, maintenance & repairs.

I have managed to keep the place rented out and have declared all rental income to benefits - this just about covers what I have to spend on mortg, service charge, insurance etc.
Recently benefits re-assessed my case and said that anything I get in from rent which is above the monthly mortgage has to be seen as income and they reduced my IS by £40+ per week. Of course this has left me unable to meet my outgoings because every penny I get from rent is used to cover the cost of the property. Until recently they allowed me to add the mortgage and the service charge before calculating any surplus (there is no surplus, absolutley none)

Can anybody point me toward the regulations for calculating 2nd home income in respect of income support. What can be deducted from rental income besides mortgage costs? e.g. building insurance, maintainence???

I have been adviced by the landlords association to lower the rent and require the tenants to pay the service charge and other costs if I cannot offset them.

This property has been such trouble and the management of rentals etc has been axhasting, to say the least. I suspect I am owed at least £1,400 in rent arrears which I will pursue through county court once i have established some stability.

Any help, similar situations, advice will be much appreciated.

I have to keep going no matter what, I must not ignore this as it will make me very unwell again. It's christmas almost and my children are so excited...

ps. Some people have suggested I tell DWP lies, I am absolutely honest and have always told the truth. I just couldn't sleep at night otherwise, honesty is the only policy.

DX2

Have you thought about selling the second house

bryanb

You can sell in negative equity, just not what you want to do.

BANNEDfromTV

You could lower the monthly rental for the renters to where it's not going to give you a profit and see if they'll do it on the understanding that any problems that come up during the lower rental period are paid for by them.

This should mean no money coming your way from the rental, its above board and wouldn't (shouldn't) affect your IS. If the people agree though, get it in writing to avoid any issues down the line.

lesandflynny

I have bought about selling it but I will not gain enough to pay off the mortgage and other costs leaving me with debt. As I am not working I have no idea how I would manage debt.

Im hoping the market will lift over next couple of years and then i'll sell.

What happens if I sold it and couldn't repay the mortgage for example... will that debt escalate, how can I pay it on benefits?

Thanks

BANNEDfromTV

Where do you live now? Is it council or your own? You could move into the rented house yourself and have it as your home thus you should be able to get help with mortgage interest payments from the Jobcentre after 13 weeks of receiving benefit.

It all depends on your own situation though.

Oldernotwiser

lesandflynny wrote: »

What happens if I sold it and couldn't repay the mortgage for example... will that debt escalate, how can I pay it on benefits?

Thanks

Your mortgage provider won't let you sell a property in negative equity unless you can make up the shortfall from other funds, I'm afraid.

Paparika

lesandflynny wrote: »

Hi

I have recently found myself unable to work due to ill health after 25 years with the same company and since my health insurance ran out I am entitled to help from benefits.

The complication is that I have a 2nd home bought in the boom as an investment that is now in negative equity (so cannot sell) and I have a mortgage & service charge on it along with other fees e.g. building insurance, maintenance & repairs.

I have managed to keep the place rented out and have declared all rental income to benefits - this just about covers what I have to spend on mortg, service charge, insurance etc.
Recently benefits re-assessed my case and said that anything I get in from rent which is above the monthly mortgage has to be seen as income and they reduced my IS by £40+ per week. Of course this has left me unable to meet my outgoings because every penny I get from rent is used to cover the cost of the property. Until recently they allowed me to add the mortgage and the service charge before calculating any surplus (there is no surplus, absolutley none)

Can anybody point me toward the regulations for calculating 2nd home income in respect of income support. What can be deducted from rental income besides mortgage costs? e.g. building insurance, maintainence???

I have been adviced by the landlords association to lower the rent and require the tenants to pay the service charge and other costs if I cannot offset them.

This property has been such trouble and the management of rentals etc has been axhasting, to say the least. I suspect I am owed at least £1,400 in rent arrears which I will pursue through county court once i have established some stability.

Any help, similar situations, advice will be much appreciated.

I have to keep going no matter what, I must not ignore this as it will make me very unwell again. It's christmas almost and my children are so excited...

ps. Some people have suggested I tell DWP lies, I am absolutely honest and have always told the truth. I just couldn't sleep at night otherwise, honesty is the only policy.

Ignore those people that tell you to tell lies, you may get away with it for a while, but they will catch up with you, i know its hard to be honest and truthful and not benefit form that, but at the end of the day honesty is the best policy and less stress to make you ill. CAB perhaps can help with advice.

woody01

lesandflynny wrote: »

Hi

I have recently found myself unable to work due to ill health after 25 years with the same company and since my health insurance ran out I am entitled to help from benefits.

The complication is that I have a 2nd home bought in the boom as an investment that is now in negative equity (so cannot sell) and I have a mortgage & service charge on it along with other fees e.g. building insurance, maintenance & repairs.

I have managed to keep the place rented out and have declared all rental income to benefits - this just about covers what I have to spend on mortg, service charge, insurance etc.
Recently benefits re-assessed my case and said that anything I get in from rent which is above the monthly mortgage has to be seen as income and they reduced my IS by £40+ per week. Of course this has left me unable to meet my outgoings because every penny I get from rent is used to cover the cost of the property. Until recently they allowed me to add the mortgage and the service charge before calculating any surplus (there is no surplus, absolutley none)

Can anybody point me toward the regulations for calculating 2nd home income in respect of income support. What can be deducted from rental income besides mortgage costs? e.g. building insurance, maintainence???

I have been adviced by the landlords association to lower the rent and require the tenants to pay the service charge and other costs if I cannot offset them.

This property has been such trouble and the management of rentals etc has been axhasting, to say the least. I suspect I am owed at least £1,400 in rent arrears which I will pursue through county court once i have established some stability.

Any help, similar situations, advice will be much appreciated.

I have to keep going no matter what, I must not ignore this as it will make me very unwell again. It's christmas almost and my children are so excited...

ps. Some people have suggested I tell DWP lies, I am absolutely honest and have always told the truth. I just couldn't sleep at night otherwise, honesty is the only policy.

Just sell it!
Why should the state assist in helping you when you own two properties.

MissMoneypenny

If you own the home you live in too, the mortgage lenders of your second home might let you put any debt from the sale, onto your first house as a charge.

How will you pay the mortgage on your second home if you don't have any tenants or they don't pay the rent?

dmg24

BANNEDfromTV wrote: »

You could lower the monthly rental for the renters to where it's not going to give you a profit and see if they'll do it on the understanding that any problems that come up during the lower rental period are paid for by them.

This should mean no money coming your way from the rental, its above board and wouldn't (shouldn't) affect your IS. If the people agree though, get it in writing to avoid any issues down the line.

Do you post on this board to help, or just to get the OP into trouble? :rolleyes:

A sudden reduction in rental income will raise questions with the JCP, and setting a rent below market levels would be seen as deprivation of capital (with the difference between the level charged and the market level being treated as notional income).