council house purchase and benefits

elantan

hi wonder if anyone can give me advice (so i can pass it on to the person that asked me) is it possible to buy your council house whilst on benefits and if so does it affect any benefits or anything else like prescription charges dental charges eye prescriptions etc.....living in scotland (dont know if this makes any difference or not)

ukdickie31

Hi

Would responsible lenders give a mortgage to a person on benefits ?

How would they ensure it was repaid ?

Would it be a sensible decision for the lender ?

Would it be a sensible decision for the purchaser ? - house reposession if mortgage cannot be afforded etc

Eager_Elephant

Hi,

I'm just wondering how she can afford the mortgage - are one of her children going to help??

She would not be entitled to Housing Costs to pay mortgage if mortgage was taken out while on Is or JSA.

She would still however get Council Tax Benefit.

Also if she put in a right to buy the Housing Bebefit fraud team may look into it as there may be a question as to where the money is coming from.

Also if she is thinking of putting the house in families name they have to have been living with her for 12 months before they can go on the Right To Buy application?

EE

Sorry am assuming female for some reason

elantan

thanks for the info i'm honestly not sure of the full situation (as i dont know the person but have been asked by someone else) as far as i'm aware money is not the problem i dont knwo the full ins and outs but i think(although not sure) they will get the house for roughly 5-10k and have access to this in savings infact it would actually help them get rid of money (they arnt allowed too much savings so that they can get their benefits but have nearly reached this limit)

Eager_Elephant

I would think it highly unlikely they would be able to buy the house much cheaper.

The discounts which were available years ago have now been stopped and the discounts are not very big.

In my area the price you can get your Council House at is about the same as buying one with similar spec but smaller garden privately.

I hope she has not been approached by doorstep mortgage companies, they are rife in my area and the most unsuitable people are being offered mortgages.

For info, savings limit is £16,000 which is when all means-tested benefit would stop unless over 60. Between £6,000 - £16,000 there is an amount added to income for every £250 in savings over £6,000. (this is a rough explanation and not the full story)

EE

sniperpenguin

elantan wrote: »

i dont know the full ins and outs but i think(although not sure) they will get the house for roughly 5-10k

I would LOVE to know how they plan to get the house for 5-10K :eek:

Most councils operate a discount based on the percentage of time lived in the property. However, there is a limit placed on the maximum discount (usually 50-60%) However, the person would've needed to be a resident for a VERY long time to achieve this.

For example:
Conwy council (Wales) gives 33% discount after 3yrs residence, plus an additional 1% per full year spent in the property. ON TOP of this, the maximum discount allowed is £16,000 (Thank You very bloody much Welsh assembly!)

Hard to see how the figures add up given todays valuations unless the house is:
A - Run Down
B - the size of a wardrobe
C - in the Bronx

elantan

they have lived in the house for over 30 years and are still entitled to the full discount (although this will change soon)... the house is in a very rough area and buying private a house is available for 50k ...as far as i know ...they do have mental issues and are very frugal with their money (part of mental issues) sit with no gas/elec on etc dont eat ...so have a surplus of money the person that asked me helps out with their finances and has helped the person understand the need for food gas/elec etc...but still they have too much money so the plan is to try and get rid of savings before it is too late and they loose all benefits ...this is done to try and enable the person to have a better life ...they have now started getting the person to understand the need for food etc they are trying to help understand the need for clothes etc (the person will not have much money when they do understand as they dont get alot of benefits)

cattie

I'm not sure if the rules for income support are the same in Scotland as here in Enland, only down here, anybody planning on buying a house & expecting income support to pay the mortgage interest is out of luck as income support will only pay interest on a property already owned at the time they started to claim means tested benefits.

Also if their capital is already close to the limit for means tested benefits, spending savings on trying to buy a house, or anything else for that matter, just to be able to continue to qualify for benefits is considered intentional deprivation of capital & can lead to benefits being completely withdrawn.

elantan

wasnt aware of that thanks cattie ...how then would it be possible not to get the benefits withdrawn whilst the person learns the process of living within society and trying not to get savings higher (it will be a slow process)

elantan

the reason the council house purchase was thought of was to secure a home life for the individual whilst keeping them within a known environment and trying to give them a pride within themself and their home

Zingara

Buying a house may not necessarily be seen as deprivation of capital, although from what you are saying it certainly sounds like this is what they are intending to do! Giving money away and wreckless spending is definite deprivation, but purchasing their council house/car/reasonable decoration of property/holiday is allowed within reason, I believe. It may be worth having a word with someone at the benefits section to get a definitive answer from them.

Karen