Universal Credit after utilising Right to Buy on property

[Deleted User]

Hi. My first post on here but not one I wanted to be writing!

So... myself and my wife both live in a council property. Recently, we have decided to go ahead and purchase the property utilising the eligible discount as we found this would be the easiest way for us to get on the property ladder. I was under the impression we could claim housing costs for a home you had a mortgage on. Today, we signed our mortgage agreement with our solicitor, and everything is due to finalise on 3rd June 24. To my horror, after further investigations, I came to the realisation that as it is capital, we may not be eligible to receive any help towards our mortgage payments. 

I work full-time, my wife works part-time (20 hours a week). We have 3 children. 1 of school age, and 2 under school age in the care of a child-minder for 30 hours a week to cover when my wife is at work. This costs us around the £900-950 mark each month - pretty much wiping out my wife's earnings (we end up £100.00 a month or so better off with her working). Our full UC entitlement with (renting) housing costs etc means the UC payments we get each month usually cancels out our childcare costs meaning we effectively break-even overall. Of course, I understand this monthly payment is inclusive of our current rented housing costs, childcare costs/element, and housing costs. Our new mortgage payments will be approx £50.00pcm more than we were paying in rent, and then of course there are the mandatory insurances etc that come with owning a home on top so all in all around £100 per month more.

So my question is... if we can't claim housing costs, but still have our childcare outgoings, are our earnings remain the same, how much is this likely to impact us? I've done numerous calculations but finding it really difficult to gauge approximately how much we will receive each month in order to allow us to budget moving forward.

If anyone has found themselves in a similar scenario or can give any indication as to what help we're likely to receive, I'd be very grateful as it may (or may not) put my mind at ease slightly.

Thanks in advance - and apologies for the lengthy post but I felt it key you have a full understanding of our circumstances.

HampshireH

I don't know the answer to your question but how did you pass affordability for the mortgage?

poppy12345

You've never been able to claim for housing costs through housing element when you have a mortgage. As you have a child on your claim once your housing element stops your work allowance will increase from £404 to £673/month.work-allowance-universal-credit This means that the deductions for earnings would be less. 

You can claim help with mortgage costs through Support for Mortgage Interest but this is just a loan that needs to be repaid back. 

A little concerned too that you passed affordability for this mortgage. 

fatbelly

Help with mortgage costs is not part of UC

When it was brought in, Housing Benefit (which helps with rent) was merged into it.

Help with mortgage payments has always been through Support for Mortgage Interest (SMI). The effectiveness of this has been downgraded over the years. I can point you to the rules but I am not a benefits expert so can't say whether you would be allowed to claim

https://www.gov.uk/support-for-mortgage-interest

[Deleted User]

Thanks for the feedback. Done another check and seems we will be fine anyway. Thanks for your input.

MattMattMattUK

[Deleted User] said:

Thanks for the feedback. Done another check and seems we will be fine anyway. Thanks for your input.

You will lose all of the housing element of UC, if you look in your online account this will be broken down for you. Also, do you have a deposit for the property and how much is that? Anything over £6k in savings should have been declared in your journal and reduced your payments, anything over £16k means you are not eligible for any UC. 

HampshireH

MattMattMattUK said:

[Deleted User] said:

Thanks for the feedback. Done another check and seems we will be fine anyway. Thanks for your input.

You will lose all of the housing element of UC, if you look in your online account this will be broken down for you. Also, do you have a deposit for the property and how much is that? Anything over £6k in savings should have been declared in your journal and reduced your payments, anything over £16k means you are not eligible for any UC. 

No deposit needed on a right to buy. Lenders usually take the discount as the deposit.

OP obviously isn't going to answer any questions and has solved their own problem less than 1 hour after posting. 

fatbelly

[Deleted User] said:

Hi. My first post on here but not one I wanted to be writing!

So... myself and my wife both live in a council property. Recently, we have decided to go ahead and purchase the property utilising the eligible discount as we found this would be the easiest way for us to get on the property ladder. I was under the impression we could claim housing costs for a home you had a mortgage on. Today, we signed our mortgage agreement with our solicitor, and everything is due to finalise on 3rd June 24. To my horror, after further investigations, I came to the realisation that as it is capital, we may not be eligible to receive any help towards our mortgage payments. 

I work full-time, my wife works part-time (20 hours a week). We have 3 children. 1 of school age, and 2 under school age in the care of a child-minder for 30 hours a week to cover when my wife is at work. This costs us around the £900-950 mark each month - pretty much wiping out my wife's earnings (we end up £100.00 a month or so better off with her working). Our full UC entitlement with (renting) housing costs etc means the UC payments we get each month usually cancels out our childcare costs meaning we effectively break-even overall. Of course, I understand this monthly payment is inclusive of our current rented housing costs, childcare costs/element, and housing costs. Our new mortgage payments will be approx £50.00pcm more than we were paying in rent, and then of course there are the mandatory insurances etc that come with owning a home on top so all in all around £100 per month more.

So my question is... if we can't claim housing costs, but still have our childcare outgoings, are our earnings remain the same, how much is this likely to impact us? I've done numerous calculations but finding it really difficult to gauge approximately how much we will receive each month in order to allow us to budget moving forward.

If anyone has found themselves in a similar scenario or can give any indication as to what help we're likely to receive, I'd be very grateful as it may (or may not) put my mind at ease slightly.

Thanks in advance - and apologies for the lengthy post but I felt it key you have a full understanding of our circumstances.

please don't delete your original post as it may be helpful for others