Refused benefits

fluffymovie

Unfortunately, you have been hit, like a lot of people, by the drop in house prices. Were we not to have had a recession, your 2nd property would likely be making you money by appreciating in value.

However, for HB purposes, you have capital. Unless the £30k loan was secured against the property, there is no scope for it to be disregarded or taken into account by HB.

So the situation is that you have a property which is rented out. The council will value the property and take into account your mortgage, the costs for selling and the rent that you are charging when they calculate your application.

Example, £100,000 value. we allow 10% for selling costs meaning you would have capital of £90,000. If your mortgage was £90,000 or above, we wouldn't use the capital of the bricks and mortar but would need to look at the rental income. We would choose a period of time over which to assess this (usually tied into the length of tenancy granted so 6 / 12 months for a standard AST) and calculate the rental income for this period. We then allow for the mortgage costs and other maintenance costs for upkeep of property and would then use this as capital.

I work in HB and I don't think the situation is ridiculous as you have stated. Sadly, you bought a property which you chose not to live in for whatever reason. Would it not be more wrong for the state to support you by paying rent whilst you ride out the recession and then when property values increase, you sell the house for a considerably higher price than you purchased it?

I realise that this sounds harsh and I apologise for the harsh sentiment but I don't think that moaning about the system is really appropriate in your case.

perhaps you could increase the rent for your tenanted property?

Lexxi

I don't think your post sounds harsh and I can understand why the benefits system is the way it is but they seem to be looking at this situation as if I sold my home tomorrow, which would be impossible, they would leave me without any way of buying food or paying bills for at least the 8 weeks it would take to make my tenants homeless or to sell the house which would take even longer.

I wouldn't be able to move back in with my parents again as there is now two of us and a dog and they don't have the room. I have an interview tomorrow for a 2nd job, so hopefully I might be able to clear some of the debts

fluffymovie

Just to say that if the property was put up for sale, the council would be able to disregard the capital value for 26 weeks as long as you were taking reasonable steps to dispose of it?

Might be something to consider and I do wish you the best of luck!

Blackpool_Saver

qwertyuiop12345 wrote: »

You have no choice but to do this asap. If you are on good terms with your tenants and you explain the situation to them you may find they agree to move out before the end of the notice period, if they are able to find somewhere else to rent instead.

You need to be living in the home you own as your primary residence, otherwise the situation will remain very complicated.

The other thing you must do straight away is to look into the legal documents with regard to the loan. You may need to seek the advice of a solicitor (the one who drew up these documents should be willing to explain them to you without charge).

Exactly, it's sad but true