Claiming housing benefit whilst owning another property

N_86

Hi,

I have had to give up work because I am caring for my sick baby under 1. I live in London in a private rented property but I own a property in another city which is being rented. The rent does not cover the mortgage and I am paying the deficit. My husband doesn't earn a great wage. Does anyone know if I can claim housing benefit to help pay my rent?

Thanks

Housing_Benefit_Officer

How much is the property worth and how much is the outstanding mortgage?

If the property has a capital value of more than £16k then this will disqualify you from claiming Housing Benefit.

If the rent doesn't cover the mortgage then rentl income will be disregarded.

marliepanda

N_86 wrote: »

Hi,

I have had to give up work because I am caring for my sick baby under 1. I live in London in a private rented property but I own a property in another city which is being rented. The rent does not cover the mortgage and I am paying the deficit. My husband doesn't earn a great wage. Does anyone know if I can claim housing benefit to help pay my rent?

Thanks

Do you have a lot of family in London?

If not, would it not be better for you to move to your home in another city? No more rent, no more deficit on your other home. You don't have work holding you back and if your husband isn't on a great wage then maybe he can find somewhere better in another city?

N_86

Housing_Benefit_Officer wrote: »

How much is the property worth and how much is the outstanding mortgage?

If the property has a capital value of more than £16k then this will disqualify you from claiming Housing Benefit.

If the rent doesn't cover the mortgage then rentl income will be disregarded.

Thank you so much for your advice.
It's worth 125k and I borrowed 95k 2 years ago. But I am sure house prices have fallen since I bought it so I don't think its worth as much now and that's what is preventing me selling.
I think its worth around 115k at the moment.
So they will not take into account the rental income because the rent does not cover the mortgage?

N_86

marliepanda wrote: »

Do you have a lot of family in London?

If not, would it not be better for you to move to your home in another city? No more rent, no more deficit on your other home. You don't have work holding you back and if your husband isn't on a great wage then maybe he can find somewhere better in another city?

I do not have a lot of family in London but we both have better job prospects in London. I am planning to go back in the next year or so to work so that is what is preventing me moving. I bought the property before I got married.
Thanks for the suggestion

marliepanda

N_86 wrote: »

Thank you so much for your advice.
It's worth 125k and I borrowed 95k 2 years ago. But I am sure house prices have fallen since I bought it so I don't think its worth as much now and that's what is preventing me selling.
I think its worth around 115k at the moment.
So they will not take into account the rental income because the rent does not cover the mortgage?

Sounds like you have too much equity to claim HB regardless of the rental issue.

Housing_Benefit_Officer

Capital value exceeds 20k. This will disqualify you from HB. You can still apply and let the council value it.

pmlindyloo

warwicktiger wrote: »

Your "newbie" status has made me count to 10, more than once by typing, you ow a property which you let out, but you want benefits as well? I wonder what kind of world we live in. 70 years in and the welfare system has changed from a safety net to a way of life.

She is not making any money from the rent because of the mortgage.

Any equity in the property is counted as capital.

Personally I don't see anything wrong with this.

What is the alternative? She sells it and then the capital left would still be taken into account for benefits only this time it would be less because of the fees involved.

dippy3103

Not having a go.. Genuine question.
If it's not in negative equity & is costing you money each month, would it not make sense to sell it?

TELLIT01

warwicktiger wrote: »

Your "newbie" status has made me count to 10, more than once by typing, you ow a property which you let out, but you want benefits as well? I wonder what kind of world we live in. 70 years in and the welfare system has changed from a safety net to a way of life.

The OP has asked a question, nothing more or less. The benefit system in this country has all manner of anomolies in it so there is nothing wrong in asking.

Brighty

Sell house for £115k
Pay back mortgage of £95k
Pay Estate agent fees of approx £2.3k
Pay Solicitors fees of approx £1.5k

That'll leave you with just over £16k, spend a few hundred on rent, then bang, you're under £16k and entitled to housing benefit.
No more mortgage shortfall to pay and benefits will pay most of your London rent. Win/win