Investing in property on ESA

Zstratts

Hi  first off thanks for your time. 
Im a disabled person with a fluctuatibg condition that stops me being able to do any work regularly at all. As a result ive been on PIP and ESA support group for the past 8 years.

Befofe i got sick, i purchased a house with mortgage, and have been paying this regularly. 
I now find my situation here has changed with nightmare new neigjbours And i am looking to relocate for my health and sanity. 
My house has amost doubled in price and the area i want to go to- (closer to family ) has lower house prices. 
I have been told i can port my mortgage. 

This is now causing me a headache. 
Under ESA rules i cannot have more than 16k in capital other than my first home. 
I also am lilely to never get a mortgage again in my situation unless my income changes dramatically. 
I am left with a few options. 

1) Buy an expensive house using all the money from the sale of this house so that i can still obtain esa. 

2) Buy a perfectly adequate house for my needs and live off of the proceeds, until they have gone, and then return to esa. 

3) Buy a suitable house and take the proceeds of my house sale and invest them somehow to give a passive income, hopefully to get off of esa altogether in time. 

Obviously i like the idea of option 3, and given the price of property is lower in mt destination than here, it means i could invest in a buy to let property. This appeals to me as at some point i will be elligible for an inheritence and can add to a portfolio, thereby giving me a passive income to support myself financially. 
The issue is, i cannot own a second property on ESA, and buying one rental property alone, whilst still having a mortgage and a place to live will not generate enough income to match or even overtake my esa payments. In 5-10 years of rental payments i wouod however have enough to buy another rental property and then have an income of more than esa. 

Is there a way, via a trust or similar that i can put my house sale proceeds into a trust, then manage the rental property, adding to the portfolio with the income of that as ans when, but keep esa at the same time until the income generated is enough to sustain me properly. 

Doea anyone have any ideas how this can be put into place, or better investment ideas? 

We arent talking millions, but a maximum of 60k which will either be eaten into or help enable me to come off of benefits once and for all. Its not easy with the income i have, but if i was to lose it to live on a substantially lower income i would never survive. 

Thanks in advance

calcotti

What type of ESA do you receive, contribution based ESA or income based ESA or a mixture of both?

Contribution based ESA will not be affected by capital, only income based ESA.

You will not be able to own a second property and maintain entitlement to income based ESA,

Zstratts

Income based. 
Thanks for your answer. 
Im not looking to scam, but get off of benefits, not loose thousands which is my ticket off of them, and make sure i dont make my situation worse until i can match the same amount of money i currently get. 

wilfred30

Option 2 would be less stressful

calcotti

Zstratts said:

Income based. 
Thanks for your answer. 
Im not looking to scam, but get off of benefits, not loose thousands which is my ticket off of them, and make sure i dont make my situation worse until i can match the same amount of money i currently get. 

As per my previous post the key question is

calcotti said:

What type of ESA do you receive, contribution based ESA or income based ESA or a mixture of both?

Zstratts

Apologies i did reply. I get income based esa

Zstratts

wilfred30 said:

Option 2 would be less stressful

I dont think that would be true at all. 
I would be resigning myself to life on benefits. I am never going to get better, only decline. I will not get more money when this happens given i am already on the maximum. Life on benefits is awful. No life really. Im a shut in as even if i was well enough to go anyehere i cant afford to do so .
You think taking profit from a house sale and carving out a better life, or standard of life for the one i currently have would be less hassle than having to rob peter to pay paul each month or decide if i heat my house or eat? 
It is not sustainable, and if i decline much more i will be in a very bad position indeed. If i was to take the 60k and live on it, if i match the esa rate it would last me 7 years, then end up back at square one. 

calcotti

Zstratts said:

Apologies i did reply. I get income based esa

Apologies, I see that now - I missed it before!

calcotti

Zstratts said:

wilfred30 said:

Option 2 would be less stressful

I dont think that would be true at all. 
I would be resigning myself to life on benefits. I am never going to get better, only decline. I will not get more money when this happens given i am already on the maximum. Life on benefits is awful. No life really. Im a shut in as even if i was well enough to go anyehere i cant afford to do so .
You think taking profit from a house sale and carving out a better life, or standard of life for the one i currently have would be less hassle than having to rob peter to pay paul each month or decide if i heat my house or eat? 
It is not sustainable, and if i decline much more i will be in a very bad position indeed. If i was to take the 60k and live on it, if i match the esa rate it would last me 7 years, then end up back at square one. 

3) isn't an option.
1) has the disadvantage of meaning that you may have more maintenance costs etc due to having a bigger house (although I realise that a more expensive house doesn't bevetsarily mean a bigger house).

However with 1) you are talking of buying a more expensive house and porting the mortgage. Can you not use the proceeds of the sale to buy a new house and pay down the mortgage so that you are left with capital below £16,000 and a smaller mortgage to continue paying off.

Nannytone

Optuin 2 is the logical choice, but you wouldnt be able ti reclaim esa.  Instead you would claim uc.

Unless of course it may be possible to keep the claim open on a ni credit only basis?

TELLIT01

Even if it was possible to set up a trust it would probably cost thousands to do so and have annual fees to manage it.  I'm afraid you just have to accept that if you sell an expensive house and move to a cheaper one the capital will have to be used to support yourself.  The benefits systems is supposed to be there to support those in financial need.  Whether it actually does that is a question for another day, and possibly another forum.