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Help to Buy - Can you buy a flat or house on benefit income only?

(8 Posts)
dotnet Tue 26-Mar-13 16:05:36

I have a very low value flat which I rent out. I'd like to sell, around autumn 2016, when, at a guess, it'll be worth around 60K.
My tenants, a couple, are unemployed. He is registered as her carer. The rent they currently pay to me is £360 monthly; most of this is their housing benefit.
She really adores the flat and would love to live there permanently.
Under Help to Buy, if they can continue to pay the £360 each month, I'm fairly sure that would cover a £60K mortgage (or would it)?
I understand that, under Help to Buy, they would have to find a 5% deposit, - which'd amount to £3.000. This might be impossible for them to raise within the next two and a half years - it's a lot of money, looked at that way.

Any suggestions or observations? I'd be pleased to let them buy the flat. I can't afford to let them have it for less than the market rate, as I work part time and my income is just below the tax threshold.

noisytoys Tue 26-Mar-13 16:10:36

You can't use housing benefit to pay a mortgage

dotnet Tue 26-Mar-13 16:22:08

Oh, that's that, then. Actually, after posting, I saw that other thread asking a similar question, but in a very different context, so I was steeled for your response!
It ('no' to HB) doesn't make a lot of sense, though. If they'd been able to get a mortgage, they'd be independent of housing benefit in twenty-five years' time - whereas if HB can't be used for mortgage payments, they'll be entirely dependent on housing benefit as long as they both live, assuming they stay together.
It's a bit like the student loans thing - it's costing far more govt money in the long run.

AgentProvocateur Tue 26-Mar-13 16:30:54

But she could use DLA, if she gets it. (You said he was her carer). I've seen this happen with people with LD. Not easy, but it can be done.

specialsubject Tue 26-Mar-13 16:38:12

Help to Buy is new builds only. So it doesn't help sales, and covers the country in houses with tiny rooms....

and it doesn't help you or your tenants. Sorry.

KnitMinion Tue 26-Mar-13 16:42:50

You can get something called Support for Mortgage interest if you have a mortgage though - although, as the name suggests, it only helps with paying the interest and not the capital.

dotnet Tue 26-Mar-13 17:14:44

Hi, specialsubject - I think you are wrong about the new builds thing. I read an article in the Sunday Times Money section yesterday and there were two types of help; only one was specifically and solely for new builds. But thanks for posting. I'll reread the Sunday X article in case I've misunderstood!

AgentProvocateur that is interesting about DLA. I'm not sure what the disabled benefit actually is which the tenants get, but I think it must be DLA - I know she has told me she is classed as severely disabled. So that'll be worth investigating. Thanks.

specialsubject Tue 26-Mar-13 18:16:57

you're quite right:

mortgage guarantee may help. BUT if it works as well as funding for lending, it will be a real chocolate teapot. And of course there is an election in between.

I keep telling myself that democratic government is better than the alternative. :-)

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