Housing benefit, inheritance and purchasing a property to live in

born_again

Spoonie_Turtle said:

HillStreetBlues said:

Could the person put the £100k inherence and get a SMI  for the other £100k to buy property?

Looking at options for the OP

Would a 70-year old with no income other than benefits even be able to get a mortgage though?

70 is the max age that most would take. TBH. I do not think any would go passed 70.

FallingLeaves

peb said:

Buy in his name. Equity (release) mortgage.  However the big issue is the maintenance of the property thereafter, service charges can increase spectacularly.

I have not heard of equity release mortgage before, will read up on that. Can you explain your idea a bit more please?

tightauldgit

HillStreetBlues said:

tightauldgit said:

I think you would have a hard time claiming that someone with 100k in liquid assets in the bank is in danger of becoming homeless.

If a person is issued with a Section 21 they are threatened with homelessness, nothing to do with that's in the bank.

tightauldgit said:

Incidentally last year I was claiming UC and then my inheritance came through from my father's passing away - I intended to use it to clear my mortgage as the payments were not sustainable for me with minimal income. UC people seemed very non-commital on whether it would be considered deprivation of capital if I continued to claim but seemed to suggest it might well be. As it was the residual inheritance put me over the savings limit anyway so it wasn't an issue I had to press - but were they incorrect?  

Paying of a mortgage is always allowed on UC. 
With UC paying off a debt is never DoC 

 

Evicting someone is not the same as threatening them with homelessness. Someone with 100k in the bank is very capable of finding and paying for somewhere to live. they aren't in the least bit in danger of becoming homeless. 

That was my point on the UC also but they didn't seem convinced at the Job Centre when I talked to them. And nobody in the UC system ever gave me a definitive answer on it. As I say I never had to push the point though. But good to know I was probably right in my thinking. 

ayupmeduck

FallingLeaves said:

elsien said:

Inheritance issues aside (and disregarded capital applies to where someone has inherited a property, rather than cash), I would query if they can get housing benefit for a house they own, even if they only own it in part? 
And even if they can, the local authority would need to be assured that it was a properly commercial tenancy, and that you would evict them if you needed to do so.  Can you evict someone who owns half the house they are living in?
And what happens if you need to realise the asset and sell - divorce, illness, bankruptcy? 

On the face of it, it sounds fraught with complexities. Do you really want to go there?

Yes, it does seem rather complex. 

Can you see any other solutions we can explore that would provide some security?

Other than continuing to rent, stopping the HB and spending away then inheritance over a period of years on rent, and then getting back on HB when the money has all gone.

That is how it should work. Why should someone get benefits when they have a means to support themselves!

elouise01582

There are also RIOs: https://www.moneyhelper.org.uk/en/homes/buying-a-home/retirement-interest-only-mortgages

ElwoodBlues

Equity release mortgage is probably your only hope in these circumstances.

With a conventional mortgage, lenders wouldn't accept an extra person on the deeds not also being on the mortgage. 

Muttleythefrog

tightauldgit said:

HillStreetBlues said:

tightauldgit said:

I think you would have a hard time claiming that someone with 100k in liquid assets in the bank is in danger of becoming homeless.

If a person is issued with a Section 21 they are threatened with homelessness, nothing to do with that's in the bank.

tightauldgit said:

Incidentally last year I was claiming UC and then my inheritance came through from my father's passing away - I intended to use it to clear my mortgage as the payments were not sustainable for me with minimal income. UC people seemed very non-commital on whether it would be considered deprivation of capital if I continued to claim but seemed to suggest it might well be. As it was the residual inheritance put me over the savings limit anyway so it wasn't an issue I had to press - but were they incorrect?  

Paying of a mortgage is always allowed on UC. 
With UC paying off a debt is never DoC 

 

Evicting someone is not the same as threatening them with homelessness. Someone with 100k in the bank is very capable of finding and paying for somewhere to live. they aren't in the least bit in danger of becoming homeless. 

That was my point on the UC also but they didn't seem convinced at the Job Centre when I talked to them. And nobody in the UC system ever gave me a definitive answer on it. As I say I never had to push the point though. But good to know I was probably right in my thinking. 

I think it reasonable to say Jobcentre staff will be fairly clueless as they often are on benefit rules.. and can be relied on to often give absolutely incorrect information....in my experience such also have been non committal...  however in the end a decision maker decides given the rules they probably will understand and paying a debt won't be considered deprivation.

On first point obviously money in bank is slightly separate from a risk of immediate homelessness as pointed to... and worth adding I see quite regularly around where I live that there are families offering things like paying rent a year in advance to get accommodation and still failing... some of them facing situation of a landlord who is selling up.

No advice to offer the Op other than given.... it's a shame that the inheritance is significantly different than the theoretical purchase value of the flat as mortgage and other options as discussed add complexity.

Muttleythefrog

ayupmeduck said:

FallingLeaves said:

elsien said:

Inheritance issues aside (and disregarded capital applies to where someone has inherited a property, rather than cash), I would query if they can get housing benefit for a house they own, even if they only own it in part? 
And even if they can, the local authority would need to be assured that it was a properly commercial tenancy, and that you would evict them if you needed to do so.  Can you evict someone who owns half the house they are living in?
And what happens if you need to realise the asset and sell - divorce, illness, bankruptcy? 

On the face of it, it sounds fraught with complexities. Do you really want to go there?

Yes, it does seem rather complex. 

Can you see any other solutions we can explore that would provide some security?

Other than continuing to rent, stopping the HB and spending away then inheritance over a period of years on rent, and then getting back on HB when the money has all gone.

That is how it should work. Why should someone get benefits when they have a means to support themselves!

Worth caveating of course that some benefits are not means tested, unlike U/C which is, so there will be people receiving benefits who have other means to support themselves.

sammyjammy

ElwoodBlues said:

Equity release mortgage is probably your only hope in these circumstances.

With a conventional mortgage, lenders wouldn't accept an extra person on the deeds not also being on the mortgage. 

Not a hope!  You can't buy a house with an equity release mortgage.

ElwoodBlues

sammyjammy said:

ElwoodBlues said:

Equity release mortgage is probably your only hope in these circumstances.

With a conventional mortgage, lenders wouldn't accept an extra person on the deeds not also being on the mortgage. 

Not a hope!  You can't buy a house with an equity release mortgage.

There's an estate agent round here who advertises all their properties on Rightmove twice - with one price for full purchase and another, heavily discounted rate, for over 65's only. It's some kind of equity release scheme, or equivalent. So it would appear to be possible (unless it's only for people selling another property as part of the process).