Capital own home possible rent impact on ESA (IR) PIP HB Ct

Janetta

Hello Again, ( second attempt)
Really sorry about this but really need some help as I know some- one may be able to simplify this.
So, I live in a( council house) and receive the above benefits.I write to ESA if i can rent out a property i own with the rent monies going towards paying the mortgage. With a small loss to myself.
They write back the following - if some- could explain this to me with a example thanks -
A
"If your mortgage exceeds your rental income it is unlikely we would take anything into account but a decision will need to be made when you have decided what to do "

They then write:
B
Rental income from a property other than your home is usually taken into account as capital rather than income, with some allowances if you use any of the rent to pay a mortgage on the property.

I have written / spoken to them in April and again today explaining i just want a yes or no - could some - one please explain if they are saying Yes or No. They have all my details e. G outstanding mortgage details £180,000, know my mortgage monthly payments of £890

1.Could some- one benefit savvy share their experience if they have done this ? How it works?

2.Then explain what those two sentences/ paragraphs mean. It's really stressing me out - new to benefits.


Sorry this is a ramble but I wish they would just say yes or no as some one wants to rent asap. Or it continues to be up for sale / auction. as the 26 week disregard is nearly up.
Thank you for replies

tea-bag

Janetta wrote: »

Hello Again, ( second attempt)
Really sorry about this but really need some help as I know some- one may be able to simplify this.
So, I live in a( council house) and receive the above benefits.I write to ESA if i can rent out a property i own with the rent monies going towards paying the mortgage. With a small loss to myself.
They write back the following - if some- could explain this to me with a example thanks -
A
"If your mortgage exceeds your rental income it is unlikely we would take anything into account but a decision will need to be made when you have decided what to do "

They then write:
B
Rental income from a property other than your home is usually taken into account as capital rather than income, with some allowances if you use any of the rent to pay a mortgage on the property.

I have written / spoken to them in April and again today explaining i just want a yes or no - could some - one please explain if they are saying Yes or No. They have all my details e. G outstanding mortgage details £180,000, know my mortgage monthly payments of £890

1.Could some- one benefit savvy share their experience if they have done this ? How it works?

2.Then explain what those two sentences/ paragraphs mean. It's really stressing me out - new to benefits.


Sorry this is a ramble but I wish they would just say yes or no as some one wants to rent asap. Or it continues to be up for sale / auction. as the 26 week disregard is nearly up.
Thank you for replies

So lets see if I have this right...

You have social housing that you want tax payers pay for while accumulating a good asset in the form of a rented out house?

Any chance you could give up your council house to somebody who needs it and live in YOUR house?

Wow I knew benefits are in a mess but this just caps it off.

Janetta

Sorry it's not clear.

I live in a council home and receive the benefits mentioned.
I also own my own home in which there is a 26 week disregard which can be extended. This house is empty and up for sale.
I just wanted a interpretation of of A & B and if anyone had experience of this. The impact on my benefits.
Thank you all for

I

GirlFromMars_2

I think B is incorrect. Any income over certain disregards like Mortgage Interest would count as Income not Capital.

Is there any Capital in the Property? This would count as Capital.

Housing Benefit Officer will be able to give you a correct answer.

Who will be living in the property?

Janetta

Hello Tea- Bag,
Thank you for your response. I will be making a loss each month & in negative equity, trying to sell/ auction before a repossession.
Trying all options...
Thank you

TELLIT01

Strange as it may seem, rental income is treated as Capital not Income for ESA purposes at least. It's something most people working for DWP can't understand the reasoning behind either.
If the rental income is less than the mortgage then nothing is taken into account against your benefit.

Janetta

Hello girlfromars,

Hiya, huge mortgage no capital, interest only payments are £400 per month - with rental at £700 per month - there would still be shortage of £ 200 .... Loss to myself.
That's why I am trying to get there response interpreted ... Thanks

Janetta

Hello Tellit01,
So do you think receiving the £200 less per month will impact my benefits ... If they are confused so am i .
Thanks for the reply

GirlFromMars_2

TELLIT01 wrote: »

Strange as it may seem, rental income is treated as Capital not Income for ESA purposes at least. It's something most people working for DWP can't understand the reasoning behind either.
If the rental income is less than the mortgage then nothing is taken into account against your benefit.

Wow that is odd. Thanks!

rogerblack

Isn't the other issue that the OP wouldn't be entitled to HB at all if they own a property they are not living in?
Separate from the capital rules.

NYM

If you're going to let out your property, you'll need to let HMRC know because it is taxable income and you'll need to complete Self-Assessment forms each year.

Is your Mortgage provider permitting you to let ? It's really important that you have their consent to let, otherwise, they might call in the loan immediately and then you will lose it !