Renting, Universal Credit and assets issue

[Sylvia3333]

Hi all,

Just wondered if anyone can help. In difficult situ. Divorcing hubby with child, selling our marital flat, splitting 50/50 and just discovered I can't apply for mortgage for another year due to my income to add to the 50 percent asset of former home in order to house my child and I so will need to rent for a year till I'm eligible to apply to said 50k mortgage. Am I right in understanding that I will be expected to use the future home asset on rent if can't buy straight away? If so, this means I won't be able to afford the home as the rent will have eaten it! Or am I mistaken? It feels so confusing and impossible and would mean I can't buy as I wanted, even though only a humble home ! Any advice welcome

I think the equity can be disregarded for 6 months for a sale to go through. After that you’d be expected to use the money to live off.

@Overthebow Pretty depressing trap. Thanks for confirming.

It's like the government don't want you to get off UC because once all your equity is used up in rent you're stuck

It does seem that way

I think the hope is that after the 6 months, you might be in a position to fund the rent from your income?
But agree not always that easy x

Stick it into a high interest savings account while you rent? Have you used a broker for mortgage advice, or just spoken to a bank directly? I hope you can get it sorted.

Thanks @therejustbarely , could be a plan to hopefully lessen blow. Yeah was independent mortgage broker. Even though my business is viable income wise now I'm in my 3rd year, they go by the last financial year, when it wasn't as good and earlier stages. It's a bit frustrating

Surely the rent would come out your income not your savings
As another post put that 50K in a high interest account for a year.

Renting as a single mum in ordinary circumstances such as mine would mean I would need top-up support to provide an adequate home for my child and I with the current high rent rates. However, I f i have the asset, I would not be eligible for support and therefore would need to eat into my asset preventing me from buying said home from asset. Hope that makes sense

Could you try to rent somewhere cheap + potentially not that great + be ultra frugal just for a year, until you can get the mortgage? Appreciate depends on your circumstances

To some degree, but it makes it harder with an older child to consider whilst running a business (ie studio wouldn't be suitable), but I do understand your thinking.

@Sylvia3333 I understand. I think it's just a question of choosing the least-bad option. It sucks, but UC isn't ever going to be easy & it's short term. Could you get an employed job for a bit?

You may need to consider getting a permanent contract for a while. I've recently bought a house after getting a new job and the lender just wanted to see the signed permanent contract with salary confirmation.