Are you eligible for universal benefits if you have a second property?

leshaste

My good friend is destitute and unemployed with large debts. However he owns the flat he lives and another flat as well. He can't pay the mortgage on either and has put them up for sale. Neither he nor I can work out if he is eligible for any benefits. The online system doesn't seem to handle this situation and it seems impossible to talk to anyone. What can he do?

poppy12345

The property he lives in is disregarded. The other property can be disrgarded for 6 months, sometimes longer if it's up for sale. If he claims UC then he will need to declare the property he doesn't live in and a decision maker will decide. He will need to prove that it's up for sale. Is there anyone currently living in the other property?

Rubyroobs

Has he paid National Insurance contributions in the past 2-3 years ? If so then he should be eligible to claim new style JSA ( if he is job seeking) or New style ESA if too unwell to work. Both of these are contributions based and non mean tested so the extra property would not affect his eligibility to claim and would pay him an amount similar to the standard element of UC which is all he would be eligible for anyway assuming he has no children.
he should speak to an organization like CAB, stepchange or Christians against poverty for help with the debts.

ElwoodBlues

Depends how much equity he has in the flat he doesn't live in. The mortgage is deducted when working out his capital. 

Spoonie_Turtle

ElwoodBlues said:

Depends how much equity he has in the flat he doesn't live in. The mortgage is deducted when working out his capital. 

As already said by poppy, as it's up for sale it can be disregarded anyway.

leshaste

Where can I read about the second property being excluded if it is for sale?

poppy12345

leshaste said:

Where can I read about the second property being excluded if it is for sale?

Property that can be ignored

As well as your main home which is ignored completely, there are some other cases where the value of property can be disregarded (ignored) from a means tested benefit calculation for a period.

In the case of a property for sale it may be disregarded for 26 weeks from the date the property was put for sale, or such a longer period as is reasonable.

https://www.entitledto.co.uk/help/own-other-property

leshaste

Thank you. What about the rent he is currently getting from tenants in the second property which doesn't even cover his mortgage?

calcotti

Rent is treated as a return on capital not income.

leshaste

Thanks so much. That is amazingly helpful.