What constitutes 'essential repairs and alterations' for 'Amount for repairs' disregard (rule H2123)

Countryway

Don't know if anyone can help with this one....my situation is that I have sold my house and have just enough to buy another one, with there being a couple of thousand left over after moving costs. The house I would like to buy needs some alterations; such as a new heating system as it is currently running off all electric radiators which would be very expensive to run and I also would need to convert the loft space for my second daughter as it is a two bedroom house. In order to do this I was thinking about taking a £30k-£40k mortgage to do the work.

I understand that there is a disregard for 'essential repairs or alterations' for 6 months but I'm not sure if the work I want done is essential or would it just be considered that, that is a choice rather than it being essential?  I am really confused, can anyone help?

Newcad

Try taking a step back to look at it.

Can you (reasonably) live in the property as it is?

(Expensive heating is still effective heating).

If  living there as it is would be a hardship but not 'unreasonable' then any prefered changes are not "essential".

"Essential" repairs are things like fixing a leaking roof.

"Essential" alterations would be things like needed wheelchair ramps, needed wet rooms, stairlifts, etc.

NedS

Countryway said:

Don't know if anyone can help with this one....my situation is that I have sold my house and have just enough to buy another one, with there being a couple of thousand left over after moving costs. The house I would like to buy needs some alterations; such as a new heating system as it is currently running off all electric radiators which would be very expensive to run and I also would need to convert the loft space for my second daughter as it is a two bedroom house. In order to do this I was thinking about taking a £30k-£40k mortgage to do the work.

I understand that there is a disregard for 'essential repairs or alterations' for 6 months but I'm not sure if the work I want done is essential or would it just be considered that, that is a choice rather than it being essential?  I am really confused, can anyone help?

As you state you will only have a couple thousand left after purchasing the new property, it's not an issue as capital under £6k is disregarded.

Or are you implying you would want the value of the property disregarded for 6 months as you would not be living in it? As @Newcad said above, neither changing the expensive heating nor your wish to convert the loft space would prevent you from living there during the works (we recently had our house completely re-plumbed with all radiators replaced, a new hot water cylinder and an ASHP replacing an old oil boiler, and the works were completed in 3 days with us living in the property throughout).

HillStreetBlues

what would be time-frame of the work? Would you employ someone to do it?

Countryway

Thanks all.  The house I was looking at was a two bed with no heating/electrics in the loft, so currently not suitable to live in the loft space.  I have two children with disabilities, so the reason for renovating the loft would be so that one of them has their bedroom in the loft.  We would be living in the house whilst the work is done, so that is not a problem. I was going to get a professional to come in and do the work, which really shouldn't take long. The electric would be around £400 a month to run, which for me, coming from oil central heating at £100 a month, is unaffordable.  If it is considered a luxury to have another form of heating installed or for my disabled daughter to have her own bedroom with electric and heating, then it looks like I can't get the work done because I could not afford to live in it.  The issue really was with being allowed to borrow the money to do the work but it's looking like I would be penalised for that, so I guess, that answers my question; look for another house that doesn't need any work done to it!  

Newcad

I think the thing to bear in mind is that while it would not be 'unreasonable' to change to a much cheaper method of heating, (so being reasonable then it shouldn't count as 'deprivation of capital' to spend money on changing it), it isn't actually 'essential' to change it.

So if you borrow the money to do that job then once the money has been spent and no longer in your account that wouldn't be a problem.

To put it another way, while the money is sat in your bank you could spend it on anything so it will affect your benefits

However once spent and no longer in your account then it depends on if what it was spent on is/was 'reasonable' in the circumstances.

I think the disregard for 'essential' improvements is a bit of a red herring here and you should be concentrating on what would be reasonable not what is essential.

Similar for the loft conversion, it may not be 'essential' but you could argue that it was reasonable for your circumstances.

Spoonie_Turtle

Just for some extra context, DWP don't expect children to *need* their own bedroom, unless they're of opposite sex and over 10, or for medical/disability reasons are unable to share (which is a high bar). 

Do you currently rent, and if so, how many bedrooms do you get help for?  If you get rent help for 3 bedrooms already then that should be a strong starting point that it is reasonable for you to need to do this.

However if you can find a house that's already suitable (or more suitable anyway) then it probably would be simpler.  (We knows simple ≠ easy, of course!)

Countryway

Thank you.   I guess I am just trying to follow the rules and it is difficult if you don't understand exactly what they are.  Thank you for your explanation as it gives me more clarity but it definitely seems like muddy territory to me and not one I would really choose to venture in to!  At least you have helped me decide, that is not the house for me!

So, the other question would be then, if I buy a house with a mortgage that needed no work doing, so no need to borrow money.  Are there any restrictions on the price of the house you buy?  i.e. would the house need to be of the same value as your current house or would your mortgage need to be the same as your current mortgage or are there no rules on this?  Thank you

Spoonie_Turtle

No rules on it because you won't get help paying the mortgage. 

If you were to claim Support for Mortgage Interest (which is a loan towards the interest only) there is a cap, but it doesn't mean you can't buy anything above that, just that they wouldn't calculate the SMI based on the actual mortgage, only the cap.

Countryway

Thanks, that's good to know as it takes the pressure off having to buy a house for an exact amount.