Housing Benefit Help.... Home Owner

sticky_4eva_2

Me and my partner are both 23 and have 2 children both under the age of 3. We have both been made redundent and we are currently on JSA and our mortgage interest is being paid for by JSA for another 18 months but there is a shortfall every month. We are trying to sell our house but its just not happening we are in serious negative equity.

We Have been adivised by our estate agent to forget selling at the mo but to put the house up to rent for a few years.

What i want to know is would we be entitled to Housing Benefit in another property that we can afford, as the house we currently own we just cant afford to live in ourselves?

Has anyone ever come across this situation?

Thanks

bunny999

You wouldn't be entitled to housing benefit as you own a property.

Jowo_2

Very Risky strategy - if your property has a tenant that gets into arrears, or damages the property or has long voids between tenants, then you are in an even more precarious position of having to pay rent, the cost of repairs and the mortgage. Also, many lenders will not give permission for the owner to let out the property if they have a residential mortgage and no equity in it. It's a non-starter, in my opinion.

See the info on the Shelter website for home owners struggling to pay their mortgage.

Indie_Kid

Have you talked to the mortgage company?

sticky_4eva_2

Its a no go> just had a chat with the Local housing benefit department who gave me the answer.... NO As they see it as a gain it would not be possible. Thank you for the replies though.

fluffymovie

Bunny999, this isn't correct.

A 2nd property would be classed as capital and therefore depending on the value of the property and any mortgage, it might be that you would be entitled.

We take value of property - 10% for selling costs and then deduct the value of the mortgage.

It is a bit of a hassle sometimes getting the value but the ownership wouldn't preclude HB. However, rental income is counted although we would disregard the mortgage payments from it.

sticky_4eva_2

fluffy - I have no idea what that means(sorry) Are you saying in certain circumstances where the property value is less than the mortgage owed it would be possible? Also I have had some letting agents come in and the rental income for my property would only just cover my interest fees therefore i wouldnt be making any profit from the rental.

fluffymovie

That's exactly it! For example;

House valued at £200,000
We would deduct 10% as selling would incur costs.
This would mean we'd be looking at £180,000
If the mortgage was the same or more than
That, you'd effectively have no capital in the property.

We would then look at rent over perhaps 6 months. If you earned 100 per week in rent and paid 10 per week in mortgage costs, we would work out what 90 per week over 6 months would be and use that as capital.

It is complicated but I pay lots of claims with 2nd properties

applecharlotte

sticky_4eva wrote: »

Me and my partner are both 23 and have 2 children both under the age of 3. We have both been made redundent and we are currently on JSA and our mortgage interest is being paid for by JSA for another 18 months but there is a shortfall every month.



Thanks

Your mortgage interest is being paid by JSA for another 18 months? are you assuming you wont have found work by then? or are you just going to make sure you havent found work by then so you get the full 18 months?

sunnyone

applecharlotte wrote: »

Your mortgage interest is being paid by JSA for another 18 months? are you assuming you wont have found work by then? or are you just going to make sure you havent found work by then so you get the full 18 months?

I wondered the same apple!

hbgirl

i am not commenting on whether the OP proposal is a good one, but i agree with fluffybunny, if the property has negative equity the capital value will not prevent you from claiming HB on another property.

also, the rental income will be offset against outgoings (related to the property, not your every day general outgoings), eg mortage and so if this also was not bringing in a profit it would not affect your claim. even if your rental income exceeded your outgoings a bit, it might reduce your HB, as almost all income is counted, but you might still be entitled to some