Housing benefit help

Littlemee

Hi, i currently own my property, however, i have a neighbour from hell and recently been made redundant (from a job of 19years). My house wont sell because of my neighbour and living there is effecting my son quite badly and becoming a nightmare so I really need to move. As an intrim measure Does anybody know if I would be entitled to Housing benefit if I rent my property out?? Thanks in advance

HappyMJ

Littlemee wrote: »

Hi, i currently own my property, however, i have a neighbour from hell and recently been made redundant (from a job of 19years). My house wont sell because of my neighbour and living there is effecting my son quite badly and becoming a nightmare so I really need to move. As an intrim measure Does anybody know if I would be entitled to Housing benefit if I rent my property out?? Thanks in advance

Possibly, it depends how much rent you receive, how much mortgage interest you have and if the property is on the market. You would be expected to use the rent you get towards the rent you pay so you might not get much housing benefit at all. The equity you have in the property can be ignored for a period of time whilst you are trying to sell it. You would be much better off not renting it out and leaving it vacant and selling it with vacant possession.

Littlemee

HappyMJ wrote: »

Possibly, it depends how much rent you receive, how much mortgage interest you have and if the property is on the market. You would be expected to use the rent you get towards the rent you pay so you might not get much housing benefit at all. The equity you have in the property can be ignored for a period of time whilst you are trying to sell it. You would be much better off not renting it out and leaving it vacant and selling it with vacant possession.

Thanks very much, I hadnt thought about just moving out and renting until it is sold. The only trouble with that I guess is if I dont get help with housing benefit I couldnt afford to pay both rent and mortgage. Wonder if my local council will be much help regarding this x

fluffymovie

Ownership of a second property does cause issues but we would need to know more to help really
1- What income do you have now? Income Support / earnings?
2 - What is the property valued at (having difficult neighbours can mean this is lower than others in the area)
3 - What is your outstanding mortgage?
4 - What rent would you be charging and what length of tenancy would you give?

Caz3121

Littlemee wrote: »

The only trouble with that I guess is if I dont get help with housing benefit I couldnt afford to pay both rent and mortgage.

but if the rent you charge covers your rent then you would be paying the mortgage only as you do today

Littlemee

fluffymovie wrote: »

Ownership of a second property does cause issues but we would need to know more to help really
1- What income do you have now? Income Support / earnings?
2 - What is the property valued at (having difficult neighbours can mean this is lower than others in the area)
3 - What is your outstanding mortgage?
4 - What rent would you be charging and what length of tenancy would you give?

Hi fluffy movie, thanks for your help

details below to your questions x
1- What income do you have now? Income Support / earnings? I am taking home £112 per wk at the moment (started a little self employed business)
2 - What is the property valued at (having difficult neighbours can mean this is lower than others in the area) House valued at £170000 with problem neighbour
3 - What is your outstanding mortgage? £116k
4 - What rent would you be charging and what length of tenancy would you give? Rent would be Around £650/675 per onth

HappyMJ

Do you currently get the mortgage interest paid with your income support? Which would be worth about £81 per week. You can only claim support for mortgage interest if you live in the property. As you would have £150 a week rental income less the £81 in interest expense then you have a £69 a week profit which would come off either income support or your housing benefit if your income support has been reduced to nil due to your other earnings.

real1314

Littlemee wrote: »

Hi fluffy movie, thanks for your help

details below to your questions x
1- What income do you have now? Income Support / earnings? I am taking home £112 per wk at the moment (started a little self employed business)
2 - What is the property valued at (having difficult neighbours can mean this is lower than others in the area) House valued at £170000 with problem neighbour
3 - What is your outstanding mortgage? £116k
4 - What rent would you be charging and what length of tenancy would you give? Rent would be Around £650/675 per onth

Sell it. If you can get £170k, it's better to take that cash than rent it out. Even £150k would probably be a better option.

I don't think you'd get HB as they would take the asset value at £170k, take off 10% for sale costs, reducing it to £153k, then take off the mortgage, leaving £37k which puts you over the HB capital limit of £16k.

I wouldn't risk a £150k asset in this situation against an income of £7.8k, let alone a £170k asset.

Sell, rent for a bit, buy a new place.

:cool:

real1314

HappyMJ wrote: »

Do you currently get the mortgage interest paid with your income support? Which would be worth about £81 per week. You can only claim support for mortgage interest if you live in the property. As you would have £150 a week rental income less the £81 in interest expense then you have a £69 a week profit which would come off either income support or your housing benefit if your income support has been reduced to nil due to your other earnings.

If the OP doesn't live in it, and it's not a business; it would be treated as capital. Income from capital is ignored.

It would be the capital value that counts.
:cool:

HappyMJ

real1314 wrote: »

If the OP doesn't live in it, and it's not a business; it would be treated as capital. Income from capital is ignored.

It would be the capital value that counts.
:cool:

The capital in the property can be ignored for a period of time whilst it is on the market. Usually 6 months.

real1314

HappyMJ wrote: »

The capital in the property can be ignored for a period of time whilst it is on the market. Usually 6 months.

I doubt they would treat it as "on the market" whilst it was also rented out. None of which changes the "income from capital" aspect.