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| T O P I C R E V I E W |
| Maz |
Posted - 19 April 2009 : 14:32:36
Hello, not sure if anyone can answer this but here goes! We went BR in September and will shortly be moving out of our house as it's in negative equity and have included the potential shortfall on SOA. We are also both currently unemployed and claiming JSA. We do have a 1 bed flat which we are allowed to buy the BI in, it is also in negative equity but the rental income covers the mortgage with about £200 per month left for us as income. We can't live in it as we have two children and need a three bed house. We have arrears on the flat which we are paying back over the next 3 months out of the rental income excess. When we move into rented I need to apply for Housing Benefit, do you think we will get it as we can't live in the flat and we can't sell it because of the negative equity. Any advice greatly appreciated. |
| 5 L A T E S T R E P L I E S (Newest First) |
| John |
Posted - 19 April 2009 : 18:37:23
Hi Maz
I would do the same re the flat if they are offering the BI, I'm just surprised that they are.
I would take a look through the forms to see if the HB questions require an answer which would divulge the existence of an investment property. Maybe they only ask about the rental property. As far as income declaration is concerned you will of course need to disclose the £200 but by divulging the source of income, if necessary, could complicate the issue.
John White
England Jackman & Spacey |
| Maz |
Posted - 19 April 2009 : 18:30:50
Hi John
The OR said we can buy the BI in the flat. As long as the rent covers the mortgage then I thought it would be a good long term investment. Do I just tell the HB dept that we have this income and assume they reduce the HB by only the amount we clear after the mortgage each month? I want to ensure that we will get some HB until we find jobs. Thanks. |
| John |
Posted - 19 April 2009 : 18:16:52
Hi Maz
of course the decision is yours but I too would suggest you further consider the flat situation.
It's in negative equity, produces an income of £200 above repayments that means your HB application, if successful, will take this into account and for which you are prepared to be offered a reduced benefit. So in that sense the income from the property over and above the mortgage repayment is of no benefit as your HB claim will be reduced by the same sum.
My suggestion would be to consider whether you want the headache that comes with being a landlord with no financial gain.
If your thoughts are that whilst the property is in negative equity now it will be worth something by gaining equity in the long term you need to be sure this is likely to happen. If the trustee sells back the BI at a nominal fee as per a matrimonial home situation then fine. But I would have thought this is unlikely. The trustee would be much better served applying a charge to the flat which will have no time limit. Thus any future equity will go to the trustee.
John White
England Jackman & Spacey |
| Maz |
Posted - 19 April 2009 : 17:18:27
Don't want to be homeless as the Council can put you anywhere. We want to rent privately and claim Housing Benefit until we are both back in work. It's fair enough for the income from the flat coming off our HB but we will still need HB to be able to pay for rented accommodation. Any further advice??? Thanks |
| RHB |
Posted - 19 April 2009 : 16:35:34
Maybe you would have been better off letting the flat go as well, so you are in fact homeless, I really don't know. In theory you are not homeless although obviously it is too small for your needs. As regards the benefits picture, what is the deal with you having income from it? That might all come into play when assessing housing benefit. |
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