Buying flat on benefits help

johnnyloco

My mum (on income support and dla) is selling her bungalow to move into a flat a bit closer to her daughter.

The bungalow should sell for about 190k, the flat she wants to get is about 135k however the lease is very low and would probably cost around £22k to resolve. As she would have to wait 2 years before she can extend the lease can this money be put aside to avoid her coming of benefits?

Thanks for your help.

tomtontom

No, she cannot put aside money in the circumstances you describe. Even with the lease money she would be above the £16K capital limit for income support.

Can the seller not renew the lease before selling?

johnnyloco

tomtontom wrote: »

No, she cannot put aside money in the circumstances you describe. Even with the lease money she would be above the £16K capital limit for income support.

Can the seller not renew the lease before selling?

Well she has some credit card stuff she needs to pay off and with getting the flat ready there would not be much left. Not sure if the seller can renew lease we might ask them that. Not sure how long they've lived there themselves.

tomtontom

johnnyloco wrote: »

My mum (on income support and dla) is selling her bungalow to move into a flat a bit closer to her daughter.

The bungalow should sell for about 190k, the flat she wants to get is about 135k however the lease is very low and would probably cost around £22k to resolve. As she would have to wait 2 years before she can extend the lease can this money be put aside to avoid her coming of benefits?

Thanks for your help.

johnnyloco wrote: »

Well she has some credit card stuff she needs to pay off and with getting the flat ready there would not be much left. Not sure if the seller can renew lease we might ask them that. Not sure how long they've lived there themselves.

You'd need to get permission from the DWP before paying off non priority debts, if they feel the payments were made to maximise her benefit entitlement they could treat her claim as if she still had the money.

johnnyloco

tomtontom wrote: »

You'd need to get permission from the DWP before paying off non priority debts, if they feel the payments were made to maximise her benefit entitlement they could treat her claim as if she still had the money.

She'd have to get permission to pay off a credit card debt? part of the reason for moving is to pay it off.

G_M

Ask the seller to extend the lease on the understanding she will increase her offer accordingly.

I assume she owns her current property outright? Or at least the equity in it is enough to meet the purchase price of the new property? If not, she will struggle to raise a mortgage on the new property if she is on benefits.

Owain_Moneysaver

Mum should be aware that flats can have significant and unpredictable maintenance charges, and it can be hard to put money aside for these without losing benefit entitlement. It may be better to look for another bungalow closer to her current house value, to avoid accumulating capital, or risking being unable to pay future maintenance bills.

dearlouise

johnnyloco wrote: »

She'd have to get permission to pay off a credit card debt? part of the reason for moving is to pay it off.

Correct.
She's planning to move house because of a credit card??? Highly unlikely. More like, she will have equity released so she may as well pay it off. The DWP will see this scenario in that light.

johnnyloco

Owain_Moneysaver wrote: »

Mum should be aware that flats can have significant and unpredictable maintenance charges, and it can be hard to put money aside for these without losing benefit entitlement. It may be better to look for another bungalow closer to her current house value, to avoid accumulating capital, or risking being unable to pay future maintenance bills.

I've just found out it's a maisonette which has much lower service charges.

johnnyloco

dearlouise wrote: »

Correct.
She's planning to move house because of a credit card??? Highly unlikely. More like, she will have equity released so she may as well pay it off. The DWP will see this scenario in that light.

it's part of many reasons. the bungalow needs work she cant afford. moving closer as this will mean she can live independently for longer.

teddysmum

johnnyloco wrote: »

I've just found out it's a maisonette which has much lower service charges.

It's not just a case of service charges, but charges levied on all occupants when the whole block is given a facelift or necessary upgrade. People on here have found these to be very expensive.