Moving area: lone parent on benefits selling house...

tilly1note

Ok I have been scouring the internet in vain for any help on this but here is my situation anyway:

A year ago my ex left. I wasn't working at the time and haven't done since. I have (now) a 4 year old at school and an 18 mth old at home. I am in receipt of child tax credit, income support, child benefit, healthy start, council tax benefit, and my mortgage interest is nearly all paid. I don't receive, not have i ever received, any money from my ex - he's a full-time student so weasled his way out of that one so far :mad:. The house I am in i own jointly with him, and we have a joint mortgage. It was put up for sale as soon as he left last May, but as yet no luck on selling it.

I currently live in Lincolnshire, but want to move to Brighton, for reasons I won't bore you with now. Now, as I'm not currently in employment, I will assume there is no way I can get a mortgage for even a small flat in Brighton on my lonesome. However, after paying off my current mortgage and giving the ex the amount we've agreed upon, I will (hopefully!) have around 40K in equity, which i want to put towards my next property.

Here's where it gets hazy for me. I can't afford to buy a property in Brighton (or indeed anywhere for that matter heh), but I don't want to whittle away this money on rent and living expenses becuause my benefits stop. I'm not a scrounger, I intend to look for work in 6 months when my baby will be 2 and just about old enough to be left in childcare (tho I'd rather wait til she starts school :rolleyes:). When I had my initial interview for my IS claim, I was told that this money could be seen as 'set aside' for the purpose of buying a property for 'a reasonable time', without my losing IS. Working on the assumption that maybe 6 months could be seen as a reasonable time for this, here is my current ill-researched plan:

Reduce my property by a few grand and sell the bloody thing, firstly. Then find a flat in Brighton for about 800pcm. Then pay the landlord up front for 3 or if necessary 6 months (as they usually say they won't accept DSS tenants, so I don't plan on telling them). Then move to Brighton, with a view to staying at home with my baby, living in this flat for 6 months. Then, apply for LHA to cover my rent, hoping that if it works for IS, then the fact I have savings pre-allocated to buy a property shouldn't influence my claim (tenous???). By the end of this 6 month period, I will be working, and will be able to afford the rent or maybe buy somewhere - who knows, maybe even have a fella by then :j.

So, sorry for the essay, but it's a complex situation is mine heh. Can anyone advise as to the practicality of my cunning plan? PLEASE

dmg24

Hi tilly1note,

Welcome to MSE.

Your plan sounds well researched! My only concern would be that it is based on many ifs.

Your information about IS (and LHA) disregarding capital for a period of time is correct. However, you need to consider what will happen if you are not ready to work/ pay rent/ buy somewhere after the six months.

How much would you be looking to earn when you are working? Have you assessed the labour market in Brighton?

What would you do if the landlord found out that you were on benefits?

How much capital will you get from the sale of your current property (I assume the ex will be wanting some of it)? Realistically, will you ever be able to afford to buy in Brighton?

I do think that it sounds like a great plan in theory. I'm not sure that it would run so smoothly in practice?

mrs_pepperpot_3

ok, i moved the other way from brighton to lincs.... look at east worthing, littlehampton ( i know this is the otherway but propertty there is cheaper) even parts of shoreham by sea are more affordable, in lancing for example there are flats above shops 3 bed for sale, near railway so 30 mins from brighton.

mrs_pepperpot_3

http://www.michaeljones.co.uk/buying_frameset.asp

imagine you buy a starter home for 80k, arun and adur council will help you on the 50/50 so you will pay your 40k and they will pay the rest, you will still be on the properrty ladder.... worth askin about surely, adur council is excellent by the way.

mummytofour

Hi!!
I live in east preston this is between littlehampton and worthing I love it here. I am a student and today finished my college coure in Brighton where i hav been studying for the last yr. Brighton is VERY expensive. Littlehampton is nott he dump the world would have you believe and has a fab sure start centre whcih you would find very good as you havea little one.

How about shared ownership?
If you could get something with a really small share 25% you would be able to put your 40k down to cover it. Your rent would still be paid by HB and you would not be penalised for having cash in the bank. If I can help at all with area info let me know. I have only been here 2yrs but LOVE LOVE LOVE IT!

mummytofour

A little over your 40k http://www.yourhomefinder.co.uk/UserPages/ViewProperty.aspx?_Pm=0&_Id=20940&_Ru1=/UserPages/SearchResults.aspx^S_Pt=0^S_Pr=0^S_B=0^S_O=1^S_A=9^S_Ret=1&_RuL=1

tilly1note

Wow! I'm so glad I found this forum! Thanks for the quick replies already

As regards buying, yes I certainly would consider looking at nearby, cheaper areas, depending on my circumstances by then. And yes, you're right dmg, I probably will never be able to afford a flat there outright, but I would be eligible for one of these homebuy schemes, and what with my deposit and the housing situation the way it is, I would hope to be able to afford this by myself.

You're right, I don't know for definite whether I'll have found (suitably paid) employment by the end of this time, which is why I was hoping for some advice on a) how long this 'reasonable' period is in which my capital will be disregarded...is 6 mths too optimistic? or if my situation is the same regarding a property, or if i'm on a waiting list for one of these schemes or something, might longer be 'reasonable'? and b) how correct I am in assuming I will get this LHA in the interim?

As regards the landlord 'finding out' I'm on benefits - it's my understanding that landlords have no right to 'do' anything if their tenants start claiming benefits, as long as they are receiving the rent and the property is fine, etc. But of course they generally don't want DSS tenants as they assume they will be 'problematic' tenants, hence why they usually insist on references and employment I think. So hopefully when my new landlord sees that I'm a presentable sort, and I tell him/her I just sold my house and I do freelance work of some sort and am willing to pay upfront, I would hope not to have any problems .

As for the job thing, I really don't know how how much I'd be looking to earn. I will be alone in Brighton with 2 young kids so won't be looking for a full-on graduate job or looking to commute...I got halfway thru a maths PGCE when I was pregnant last time but I really don't want to go back to that. I guess realistically I wouldnt expect to earn more than 17 or 18k in a 9-5 office job, at least for the forseeable future, but I am hoping against all hope that I will be on my way to getting something published by then :cool: if I can muster up the motivation to knuckle down to it hehe. Honestly, if I am getting on well with the writing, I would prob be looking at taking a part-time job somewhere and wouldn't be able to afford to buy in 6 months....

The capital left after fees/mortgage/paying ex will be about 40K, 30 of which is money my parents lent me so we could afford to buy, and which my mum has said i can keep to put into my next house - she's lovely is my mum :j, tho that's my inheritance early hehe - so would it be an idea to 'give her that back'?? only thing is i guess there would be tax implications with bandying such huge amounts of money around?

tilly1note

oh wow more replies while i was composing my next essay! lol

mummytofour wow you sound so enthusiastic i wish i was down there with you already! yes, shared ownership or a homebuy scheme would be exactly what i'd be looking for, and certainly areas around brighton i would consider, and would be grateful for advice on.

I don't want to jump straight into ownership until i've first rented for these 6 months if i can do this without affecting my benefits. it wil give me time to assess the area, figure out the school situation and get my finances sorted, and give me time to apply for such schemes without delaying the sale of my current property. but yeah, seems there is hope eh ?

dmg24

That last post felt like I was reading about myself (minus the children)!

I also got halfway through my maths PGCE, but I gave it up because I was amazed at just how badly behaved the children were (I went to a private school, and though we used to mess about, it was a world away from my placement schools!).

Have you looked at maths tutoring as a source of income? I really enjoy it, and it gives me such a sense of achievement. My first student has just gone off to join the navy, and I actually cried at her leaving party! Also, FE colleges may be able to offer you work as a support worker, or even finance you through the rest of your PGCE when you're ready.

Back to your question ...

The standard time for the capital disregard is six months. However, I have heard of several instances where this has been extended, including one where the reason was that they were on a waiting list for shared ownership.

Although many people dislike the idea of shared ownership, I am a great advocate. It got me a step on the housing ladder in an area that I would otherwise not have been able to rent or buy.

The money from your mum is a difficult one (my parents gave me the deposit for my current place too!). Was anything put in writing as to the status of the money at the time of purchase? A good solicitor would have formalised the gift/ loan, mine didn't!

Sorry for all the rambling ... can I move to Brighton too please?! x

tilly1note

Haha yeah teaching isn't all it's cracked up to be, and I was considering tutoring too funnily enough

Erm, as for the cash....when we bought this house it was literally a case of my mum writing me a cheque and me paying the deposit with it out of my bank account. So, there are records of the money going from her account to mine, but nothing formal insofar as the house is concerned. So I'm sure I've probably done something wrong there where the taxman is concerned, but pleading ignorance *cough*, if I were to do the exact same thing now, and just hand her a cheque for 30k out of the proceeds of my sale.........???

tilly1note

And YES come to Brighton with me! I need all the friends I can get