Selling my house and renting it back.

penguinSmall

I seem to have fallen foul of the housing benefit 5 year rule when selling your home and renting it back. I lost my job in December, due to the nature of said job I could not get a mortgage protection policy and so fell into arrears. Because of health issues it was difficult to get a job in the first place and as I was unsure of how long I'd be out of work I decided this would be the best option. The guy at the council is insisting I have to go to court over repossession before he will give me housing benefit because that will be the only proof he will accept that I had no choice but to sell and rent back or move. I am on income support and have provided proof that I cannot pay the mortgage and the letter from my mortgage providers solicitor saying they will take legal action if I do not come up with a grand I clearly do not have.

He made it clear when I spoke to him on the phone that he thinks I should put the house on the market for it's full value and move into a council house because, in his own words, 'We don't like paying private rents. Councils and Housing Associations are cheaper'. There are precious few Council Houses around here that are empty and the only ones I've seem are 3 bedrooms and there is just me and my daughter. It seems stupid when a bigger family may need the house desperately to put two people in it. Plus, I don't HAVE to go into a council or housing association house. I could put it on the market and move into a privately rented house anyway. On the open market the house could be sitting for months and I could wind up with less than the company I'm dealing with have offered me and then have to shell out for new carpets and curtains for a different house when I am sat here in one that needs nowt!

jennywren1976

Also don't forget that there is a £6000 limit on savings for getting full housing benefit and then the amount you get will be reduced depending on how much money you had saved.
If someone were to sell their house for £100000 plus and have this money sitting in the bank I doubt they would get any housing benefit at all.

penguinSmall

That's the other problem. I will have about £14,000 left after paying the mortgage off. I owe my parents at least £16,000 they have agreed to £8,000, so I can pay off other debts and start with a clean slate but I have been told that the Council will say the money for my parents is a gift as I cannot prove I owe them the money, how many parents do you know have contracts drawn up when they help their kids out? My dad is self employed and could not afford to retire at the age of 71, unfortunately an operation for a huge aneurysm on his aorta retired him involuntarily and they need the money back as soon as possible.

I have also been told that if I pay off my other debts in full it will be taken as notional capital unless I stop paying until I get default notices for everything. I have basically been told that I have to ruin my credit rating and financial standing thus making a bad situation worse and more stressful than it needs to be. I can understand the need to protect the system against people out to take advantage, but those types always find a way to get around things and decent people trying to keep their heads above water still get screwed because they're easy targets.

The council have been ignoring letters from my solicitor about the situation, I pointed out in March that my daughter was doing her GCSEs and did not need the stress of the situation or the stress of moving in the middle of it all. They have used delaying tactics because at the end of next week her exams will be over. The fact that she has been unable to study or concentrate on anything for fear of us ending up homeless and my parents penniless while we have money we owe them and can't give them back even though it is sat in my bank is apparently irrelevant.

beccysmum

Hi Penguinsmall

I work as a trainer in Housing Benefits, and would strongly urge you to appeal against this decision. They are clearly operating a blanket policy - they are supposed to look at each case on its merits, and they have obviously not done this with you.

Have they told you any of this in writing? You need it in writing - even though it may be disheartening to see it there! Sometimes people working in benefits forget just how hard it can be (and more often, they employ people who have never been in that position).

Appealing is really easy to do - if you want I can do your letters for you. The solicitor should be advised to write in and say (s)he will make an official complaint to the local government ombudsman if they are ignoring his letters. Believe me - the last thing they want is the ombudsman going in and poking around.

As far as the debt to your parents is concerned, they are wrong. If you have paperwork from your dad that should be good enough. The burden of proof is on THEM to prove that you are lying, not for you to prove that you are telling the truth.

Regarding being told not to pay your debts off - that is the craziest thing I have ever heard! If I was in front of you, I would ask for evidence of the debt (any debt letter would do!) then proof that you have paid it. End of story.

I think you are claiming in an Authority that is absolutely rubbish. This is disgraceful, and I will honestly help you as much as I can if you want me to.

Don't let them intimidate you - they don't know what they are doing.

Best of luck
beccysmum

blue_mum

Hi

We were in a similar situation, we sold and are now renting back, but was only able to hold on for 6 months so will have to move out soon, We did however get full market value for our house at the time so I did feel lucky about this. We had to also pay off an IVA with the proceeds but at least we are now debt free and able to start anew.

Regarding housing benifit we have received it and our local housing benift office were great. I called then before we made the desicion to sell as they also helped with budgeting and advice as to other benifits we were entitled to. So when we sold we took all the evidence in (I think they were shocked at how much paper work I produced !!!) and we had a yes desicion within a week. As long as you can prove you had to sell the house you should be ok. Regarding help paying your mortgage then we found we would of had to wait 9 months for that, but by that time we would of been bankrupt and homeless. So we jumped before we were pushed .

I hope things work out for you, it is quite a stressful time

Blue

penguinSmall

Thank you so much for taking the time to reply. I have had so much going on I completely forgot about this forum. Apologies.
The guy at the Council is completely ignoring my solicitor. I have a court date for August 6th and the girl at the court says the Judge will not be impressed when I tell him I could have stopped it months ago but the Council forced me to go to court.
The guy from the Council has put very little in writing, I suppose because putting 'We don't like to pay private rents, we want you to sell on the open market and move into Council/Housing Association accommodation because it's cheaper and you'll have to use the profits to pay your expenses because I won't accept anything that isn't by the book as a reasonable expense. Every penny over the 6 grand you're allowed WILL be taken into account. You may have a moral obligation to pay your parents what you SAY you owe them but not a legal one. If you follow your moral obligation anything you pay your parents WILL be counted as notional capital. If you sell for less than the market value I can apply the notional capital rule and say you deprived yourself of the shortfall between the market value and what the buy to let company paid you in order to get benefit and reduce any benefit you might get accordingly', in writing may get him into trouble.
I can't appeal, apparently because he hasn't technically made a decision. I still own the house because he scared me out of starting the sale process back in March. My solicitor had to get to grips with the new legislation and wait ages for him to acknowledge her when she wrote to him. By the time that was done it was May, I started the sale process on May 29th but it hasn't been finalized. I still own it so I can't apply for housing benefit, he can't turn me down, so I can't appeal the decision. All he has said is he won't give me benefit unless I've been taken to court. He said in one letter 'the DWP guidelines state you must be to the point of possession' and since then he won't even reply. My MPs secretary spoke to him over a month ago and he told her he was 'writing to both me and my solicitor there and then to explain his position', we haven't heard a damned word. He told me on the phone he had no interest in the circumstances that put me here.
Why don't they just go the whole hog and bring in a law that says if you have a mortgage and you end up on benefits and can't get a job by the time your mortgage protection policy runs out, if you have one, you must sell your home and live off the proceeds til you have nowt left. If you don't have a mortgage protection policy you must sell it immediately.
I now owe more back to the Abbey, who have been brilliant, than I borrowed in the first place. In December I owed about 47,700, with all the fees and charges I now owe 50,659 or somesuch thing and that is without the interest up to the court date.
My daughter is distraught in case her exam results are bad and she can't get on to the College course she wants to do and since on of the health problems that causes me difficulty finding work is depression, all this hasn't made my job prospects any brighter.
Cheers M'dears.

wecanhelpu

Here's a good article from the BBC

http://news.bbc.co.uk/1/hi/business/6266268.stm

penguinSmall

Just read it dude. As for it being a minefield, a 'certain company' offered me 57,000 for a house worth nearer 80,000 mucked me about telling me fibs about why the sale was taking so long to go through til March after saying in December it'd be sorted by the end of January. AND they never mentioned the fact that this 5 year rule meant I might not be able to get housing benefit at the end of it. Then they could evict me for not paying my rent after the first month and sell it for what it was actually worth.
The company I am now using says they have it written into the contract that if the investor who buys my home wishes to sell, they will sell to another of the companys investors or myself, ensuring I can stay here. Of course, what actually happens remains to be seen............

worrypants

would love to know of any firms who do the buy and rent back?

I saw an ad today on tv ukhomesalliance I think it was but they do the rent back only for 10 years and nothing less
I only want to rent back for 6 months max

Very beautiful home , 4 bed detached with countryisde views with 9 and half years NHBC remaining up for £169,950

Been on the market for only 3 weeks but need to sell very very quickly to release capital to buy abroad

would definitly consider one of these firms and accept a drop in price

Aitken_2

beccysmum wrote: »

Hi Penguinsmall

I work as a trainer in Housing Benefits, and would strongly urge you to appeal against this decision. They are clearly operating a blanket policy - they are supposed to look at each case on its merits, and they have obviously not done this with you.....

Best of luck
beccysmum

Hi Beccysmum

I am thinking of bailing my parents out as a result of a business venture that went belly up. They stand to lose the lot and they owe me over £22k.

They are both retired and I have offered to purchase their house for £85k which will cover their debts

I was going to charge them some rent to help me out with the mortgage repayments otherwise I am going to struggle to survive myself

Dad is already receiving a Pension Credit and assistance with Council Tax and may need help with the rent? Do you think he will be eligible?

Admittedly the house is worth more than £85k but it is the best I can do. This is not a scam by any measure. If they let the house go they will be effectively homeless and will need full support. I also have a sister who is unable to work due to ill health and receives disability benefit (also at this address)

I am gradually slipping into more debt because I am trying to help them but my contributions are lost in huge overdrafts....

Is there any advice for a family who is desperately trying to help themselves stay afloat

Many Thanks

Aitken