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Universal Credit entitlement and Equity from house sale

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Hi, I am recently separated with two children under 16 and in receipt of Universal Credit as I am on a low income. The family home is being sold (accepted an offer and started the process) and I will be looking for somewhere to rent soon with my kids. I can’t get a mortgage on my salary. I will receive approx £100k in equity from the house sale which is not enough to buy a suitable house. My question is.......will my UC stop if I am in receipt of this money? I can’t get a mortgage right now so can this money be protected and if so for how long? Also, am I entitled to the housing cost element if I am working? I’d be so grateful for any advice, thank you!
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I do not know your personal circumstances but have you looked into shared ownership? The rent part of a shared ownership property can be part of an assessment for Universal Credit but, of course, it would depend on your financial circumstances.
If you intended to buy another property with the money from the sale of your current property then I believe that the capital can be ignored for 6 months (I need to check this) and you could continue to claim UC whilst you are buying another property.
Amount to be used to purchase premises
H2119 Where a person has received an amount within the past 6 months which is to be used to purchase premises that the person intend to occupy as their home, that amount can be disregarded from the calculation of that person’s capital where it
1. is attributable to the proceeds of the sale of premises formerly occupied as their home or
2. has been deposited with a housing association (see H2045) or
3. is a grant made to the person for the sole purpose of purchasing a home1.
1 UC Regs, Sch 10, para 13
[It is possible you may be thinking of the Support for Mortgage Interest loan, for which only people who have had 9 consecutive months of 0 earnings are eligible.]
Simple answer is no. As you will have more than £16,000 then you won't be entitled to any means tested benefits. It will only be disregarded for 26 weeks if you plan on buying another house, otherwise it will be classed as savings. Either way, once it's in your bank you need to report the changes.