I've lost my UC payment as I've bought a Shared Ownership property

Jak51

kingstreet said:

No. Of course not. Once the mortgage and purchase is completed you're stuck with it. However, if an intermediary has taken into account benefits which would end with the purchase, you may be able to complain and have some kind of redress.

Okay. Thanks.

ACG

Interesting. 
I try to avoid using benefit income if I can and rarely do use it in fairness. I do not think I have ever done what has been described, but I will definitely be paying more attention to it in future. 

I know it does not help you, but I have learnt something today. 

[Deleted User]

Really depends on what happened at the point of sale. Have to check back the documents and information you were provided during the application. 

Contact UC to find out more details. 

ElwoodBlues

Jak51 said:

@ElwoodBlues. Yes, that's correct. The proportion of rent of the shared ownership will still be taking in account, so I will receive a UC payment, but it will be £164 less a month than what I have been receiving, which is a massive shock! If I had of known this, I may not have purchased the shared ownership property as I may struggle financially without the extra £164.

I didn't realise that most of my UC payment was towards rent. It's such a complex benefits system that it's difficult to understand.

On top of this, because it it is shared ownership, I've had to pay for the flooring and there's even been extra costs for the solicitors, than what a normal purchaser would pay, e.g. the developer's properties came with £3000 worth of flooring and white goods. So, this means I have had to put everything I've got into buying this property, so have absolutely no saving now. For example, deposit, £2600, Sol fees £2500 and Flooring £1500.

I would have thought the affordability for the mortgage calculations would have had sufficient headroom to cope with the £164 difference. That sounds very marginal if it genuinely makes it unaffordable for you now.

Reality is that UC is quite generous towards rent, but offers nothing at all for people with mortgages unfortunately. The SMI loans don't look helpful at all, I'd avoid unless as an absolute last resort temporary solution.

silvercar

I think here that you have to take some responsibility, it isn’t up to a lender to advise you on benefits. Lender’s aren’t expected to know your full benefit entitlement or how it will change, they also can’t be expected to decipher the various components of your benefits. They could even throw back to you, that you said your benefit would continue without investigating if it would change.
I would expect someone buying a property that is made up of part rent and part mortgage (the clue in the title shared ownership) to realise that the rent element of UC will only pay towards your rent.

kingstreet

silvercar said:

I think here that you have to take some responsibility, it isn’t up to a lender to advise you on benefits. Lender’s aren’t expected to know your full benefit entitlement or how it will change, they also can’t be expected to decipher the various components of your benefits. They could even throw back to you, that you said your benefit would continue without investigating if it would change.
I would expect someone buying a property that is made up of part rent and part mortgage (the clue in the title shared ownership) to realise that the rent element of UC will only pay towards your rent.

This is where the broker has (IMHO) to take some responsibility. We have always obtained every page of a benefit award to ensure the components which will continue can be included in affordability and those which will cease, can't. TBH you do the same with every income strand from basic, overtime/bonus etc to maintenance.

Jak51

ElwoodBlues said:

Jak51 said:

@ElwoodBlues. Yes, that's correct. The proportion of rent of the shared ownership will still be taking in account, so I will receive a UC payment, but it will be £164 less a month than what I have been receiving, which is a massive shock! If I had of known this, I may not have purchased the shared ownership property as I may struggle financially without the extra £164.

I didn't realise that most of my UC payment was towards rent. It's such a complex benefits system that it's difficult to understand.

On top of this, because it it is shared ownership, I've had to pay for the flooring and there's even been extra costs for the solicitors, than what a normal purchaser would pay, e.g. the developer's properties came with £3000 worth of flooring and white goods. So, this means I have had to put everything I've got into buying this property, so have absolutely no saving now. For example, deposit, £2600, Sol fees £2500 and Flooring £1500.

I would have thought the affordability for the mortgage calculations would have had sufficient headroom to cope with the £164 difference. That sounds very marginal if it genuinely makes it unaffordable for you now.

Reality is that UC is quite generous towards rent, but offers nothing at all for people with mortgages unfortunately. The SMI loans don't look helpful at all, I'd avoid unless as an absolute last resort temporary solution.

Yes, you are probably right. It's just a shock that's all. Just seems a crazy system when there is money there to support people, but when you buy a share in a house, it reduces, even though, I'm on the same salary and I'm now paying £150 a month extra than what I was previously paying for my rent, so basically I'm £300 a month worse off. 

housebuyer143

Jak51 said:

ElwoodBlues said:

Jak51 said:

@ElwoodBlues. Yes, that's correct. The proportion of rent of the shared ownership will still be taking in account, so I will receive a UC payment, but it will be £164 less a month than what I have been receiving, which is a massive shock! If I had of known this, I may not have purchased the shared ownership property as I may struggle financially without the extra £164.

I didn't realise that most of my UC payment was towards rent. It's such a complex benefits system that it's difficult to understand.

On top of this, because it it is shared ownership, I've had to pay for the flooring and there's even been extra costs for the solicitors, than what a normal purchaser would pay, e.g. the developer's properties came with £3000 worth of flooring and white goods. So, this means I have had to put everything I've got into buying this property, so have absolutely no saving now. For example, deposit, £2600, Sol fees £2500 and Flooring £1500.

I would have thought the affordability for the mortgage calculations would have had sufficient headroom to cope with the £164 difference. That sounds very marginal if it genuinely makes it unaffordable for you now.

Reality is that UC is quite generous towards rent, but offers nothing at all for people with mortgages unfortunately. The SMI loans don't look helpful at all, I'd avoid unless as an absolute last resort temporary solution.

Yes, you are probably right. It's just a shock that's all. Just seems a crazy system when there is money there to support people, but when you buy a share in a house, it reduces, even though, I'm on the same salary and I'm now paying £150 a month extra than what I was previously paying for my rent, so basically I'm £300 a month worse off. 

Yes, but you own a house. So you are better off than renting and may get equity etc. The government shouldn't pay more than your rent - not really all that crazy. 

Sistergold

£164, sorry to hear this but could you not work extra, get a lodger while you get over this shock? It has always baffled me how benefits can be included in affordability check? How can you calculate a mortgage based on what the government gives? 

kimstead19

Can I please ask who your mortgage is with as I'm currently trying to get a mortgage with someone that will use the 'housing element' of universal credit towards my income figure.