Capital assets and 10% sale expense query on a housing benefit claim

rode_tulpen

Just a quick query, as I can't find more detailed info elsewhere.
When a claim for housing benefit is assessed, how is the value of the asset calculated. Say, for example, the house (which is rented out) is worth 100k, and there is a mortgage of 90k on it - is the 10% sale expense calculated on the 100k or on the difference between the value of the house and the outstanding mortgage, i.e. 10k?
Thanks

rode_tulpen

Just giving this a bump as I really could do with someone's opinion

shjo558

It's the market value, less 10% for sale costs, less mortgage outstanding. The net equity is divided up to work out your portion.

Example:-

Market Value £100K so 10% costs are £10K. Less mortgage outstanding, say £40K.

Net equity would be £50K but if the property was owned by 2 people, only £25K would be taken into account.

Hope that makes sense.

shjo558

The relevant legislation is held in the Housing Benefit Regulations 2006. Here's a link, just scroll down to Regulation #47:-

http://www.opsi.gov.uk/si/si2006/20060213.htm#47

fluffymovie

The value of rental income is also taken into account

if you rent out for £100 per week but your mortgage is £20, we would use £80 over a relevant period. So say you gave a years tenancy, we'd use 80 for a year as capital as well as any asset value

rode_tulpen

Thank you so much for answering this for me :T It is such a great help.
shjo558, I'd had a look at the housing legislation, but I wasn't too sure whether it was in the particular order stated (i had an inkling but nothing certain). The council are taking the mortgage off the value THEN deducting the 10%, cheeky so and so's!!
Fluffymovie, our rental (after any deductions like agency fees) comes in at less than what we pay in mortgage, so there's no profit in it for us. We're reluctant landlords and, tbh we'll be glad to get shot of it as soon as the market picks up in the area. So at the moment, this doesn't apply.
Thanks again :T:T