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

DaisyFlower

Some landlords dont accept housing benefit for valid reasons, ie their mortgage or insurance company insists on no DSS tennants. If you were to conceal this fact and anything happened, you are putting the landlord at risk of not being covered in the event of a fire etc. You need to be honest with them if you intend to claim benefits.

dmg24

tilly1note wrote: »

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.........???

I've been thinking about this, and I wonder if it could look more dodgy if you gave the £30K back (wrong word, but you know what I mean!). I'm sure you'll be fine for the capital disregard for as long as you are actively looking for a property, as long as that time didn't go on for years!

I don't think there would have been tax implications for your mum if the money was classed as a gift (though there could be if it was an investment). The only problem would be if she needed to go into care within seven years of the gift, when it may still be treated as hers (I'm not sure of the exact rules around this).

tilly1note

Yessss hmm, well with any luck she won't be going into care quite yet, and it definitely wasnt an investment as I wouldn't be giving her back more than she originally gave, so if it's a straight loan, paid back without interest or anything, do you think that would look 'dodgy'?

The other thing I was wondering about was whether it's definitely regarded as okay to pack up and move to a different area as I'm planning to do. For example, most shared ownership/homebuy schemes I have looked at around the country require you have a 'local connection', so would having rented in the area and having my kids in local schools, etc. count in their eyes? Moreover, when applying for LHA are there likely to be issues regarding why I am claiming in a different part of the country, or is it simply a case of meeting the criteria for IS and whatnot, and demonstrating that I am currently renting the appropriate sized property, etc.??

dmg24

In terms of IS and LHA, I can't see that they have the right to investigate why you are moving areas. They may ask why you are moving, and as long as that reason is reasonable, I can't see them delving into it too much.

I know of people who claim HB, and live by the coast in the summer and then come back to Nottingham for the winter. They don't encounter any problems.

AFAIK they will look at the gift/ loan issue on a case by case basis, and therefore it depends on the individual Decision Maker. It might be worth asking the question now to see what they say (and get any response in writing!).

I see your concern about the local connection issue with shared ownership. I find this is more common in certain areas, so it might be worth looking at current developments to get some idea. When I had a SO property it wasn't an issue, but then there wasn't a waiting list at the time ... because most people could afford to buy on the open market! x

tilly1note

mummytofour wrote: »

Hi!!
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.

I actually found an ideal place which will take anything upwards of 12.5%. But don't I have to be employed to qualify for SO? And if so, HB/LHA won't cover the rent? Because of course I do plan to get a job, but if I could move straight into my own place with the kids and have the rent paid indefinitely (as they are currently paying my mortgage indefinitely), then I would wait until the youngest was in pre-school before getting a proper full-time job. It would take the pressure off.

Also, does anyone have experience of being given a mortgage whilst living solely on benefits?

Before you say it, yes I have emailed the SO people about this and am waiting for them to get back to me...but even if they say I must be employed, I would still like to know if that is always the case, as I understand these schemes vary wildly from area to area and company to company?

dmg24

A year ago there would have been several lenders who would give you a mortgage on benefits, but now you will be very limited in your choices, and probably end up on a stupidly high interest rate and long tie ins.

Some SO schemes will take unemployed people, but I think the mortgage would be your stumbling block. When I applied they would accept unemployed people, but only if they could cover the mortgage and rent without resorting to benefits. That was a long time ago now, could have all changed!

You are still eligible for LHA on the rent element of SO property, but you're right, your income may be too high once you are working.

tilly1note

:S hmm

well the mortgage thing is more a long shot tbh...i guess i'll investigate it, but to buy 12.5% share with the capital i'll have after my sale I won't need a mortgage. But how to cover the rent without benefits? Surely if you're financially independent enough to be able to do that whilst unemployed, you wouldn't qualify for the SO scheme in the first place?

dmg24

tilly1note wrote: »

:S hmm

well the mortgage thing is more a long shot tbh...i guess i'll investigate it, but to buy 12.5% share with the capital i'll have after my sale I won't need a mortgage. But how to cover the rent without benefits? Surely if you're financially independent enough to be able to do that whilst unemployed, you wouldn't qualify for the SO scheme in the first place?

That's true! I think the good thing about HA's is that they are there to help, so I would have an open chat with someone from there. Obviously the rules will vary from scheme to scheme, but they are the best source of information.

Let us know how you get on, and put the kettle for when I come to visit (can I bring the cat? ) x