Universal credit and owning a second property

Hi all. I know this has been touched upon before but I have a slightly different question. So, we get DLA for one of our children and hence some UC. My husband is in full-time work and is earning well. I’m at home as it has been difficult to work due to my child’s health. So I’ve decided to start an Airbnb business for which we are releasing equity on our current property so we can buy the second one. I get it that this would probably mean that the UC stops. However, we still don’t have a completion date for the new property and are already paying the second mortgage. I’ve told UC about our plans and they keep asking for a completion date and when we have received the money. The money is kept in a new account and is solely for the purchase of the flat together with associated expenses. We do not use the money for us in any way. So, the question is, can they stop the UC before the completion date as we technically do not own the 2nd property yet? Thanks in advance 

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  • TELLIT01
    TELLIT01 Posts: 16,245
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    I don't think money release from your current property will be disregarded for UC purposes.  The only circumstances I know of where money may be disregarded is when the property you live in is sold.  If that money is intended to be used for the purchase of a new property it may be disregarded for a period of 6 months initially.  The fact that you have released equity with the intention of purchasing a 2nd property does not fall into that category.
    Yes UC can be stopped purely on the basis of the amount of capital you have available.
  • Alice_Holt
    Alice_Holt Posts: 5,853
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    edited 29 November 2023 at 4:33PM
    UC should have stopped in the assessment period during which you received the money released by increasing your mortgages (assuming this is over £16k). 

    So, for instance, if your UC assessment period (AP) runs from 10th to the 9th of the month. 
    You received the money from the second mortgage on the 1st October.
    Therefore, at the end of your UC assessment period on Oct 9th you have more than £16k in savings / capital.
    UC ends, and no UC payment is due for that AP starting 10th September. 

    You should make clear to UC that you have this money in a new account, and the dates your savings exceeded both £6k and £16k.
    It's likely you will have an UC overpayment to pay, if you haven't disclosed the full amount of your savings to UC.

    Edited on re-reading OP.

    Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
  • poppy12345
    poppy12345 Posts: 17,725
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    Borgal90 said:
    Hi all. I know this has been touched upon before but I have a slightly different question. So, we get DLA for one of our children and hence some UC. My husband is in full-time work and is earning well. I’m at home as it has been difficult to work due to my child’s health. So I’ve decided to start an Airbnb business for which we are releasing equity on our current property so we can buy the second one. I get it that this would probably mean that the UC stops. However, we still don’t have a completion date for the new property and are already paying the second mortgage. I’ve told UC about our plans and they keep asking for a completion date and when we have received the money. The money is kept in a new account and is solely for the purchase of the flat together with associated expenses. We do not use the money for us in any way. So, the question is, can they stop the UC before the completion date as we technically do not own the 2nd property yet? Thanks in advance 
    Are UC aware of the money that you have for the purchase of that property? As has been advised, it won’t be disregarded while you wait to buy the other property. If you haven’t reported the changes and you have more than £16,000 then there’s no entitlement to any means tested benefits. Any overpayment will need to be repaid back.
  • Muttleythefrog
    Muttleythefrog Posts: 19,691
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    edited 29 November 2023 at 2:21PM
    You say U/C keep asking for notification when you receive the money and make the 2nd property purchase but you indicate you already have that money in a new account - as above this would likely lead to elimination of entitlement and you should inform them. I can't see any obvious reason why they may consider disregarding the capital in the meantime... or of course when transacted into a second property.
    "Do not attribute to conspiracy what can adequately be explained by incompetence" - rogerblack
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