Selling and buying property while on benefits

[marykat2004]

We have a 2 bedroom council flat in a good area. We bought knowing that one day we would plan to move to a larger property, further out from the city centre.

With DH's health problems and DD getting bigger, we are thinking that the move might improve things for everyone. This is a small flat and we are really on top of each other.

My question is, does anyone know if you are allowed to sell your home and buy a new one, providing you would be mortgage-free by doing so? I know you can not move a mortgage while unemployed as I already asked the bank about doing that when I was first made redundant. But if we move even further out, it's possible that we could sell up and not have to have a mortgage.

But do the benefits people let you do that, or do they expect you to live off the money from selling your property, even though, after selling the property, we would have nowhere to live?

I know I should get proper legal advice but thought I'd see if anyone has actually done this before. Moved while on income support, with no mortgage.

thanks

Not sure about that tbh. Might it be worth trying to find 24 hours work a week between you(actually I think it still might be 16) so you do not have that worry?

Do you still owe on the mortgage?

It's an interesting question, don't think it can be that common an occurence.

As long as you complete the purchase of the new home within six months, the capital should not count as savings.

A Guide to Income Support (from DWP website) says:

"Earmarked capital
If capital from the sale of a house is earmarked for home purchase, it is ignored for up to 26 weeks or longer in certain circumstances"

Council Tax Benefit:

"Earmarked capital [HB Sch 6. 2-3, HB(SPC) Sch 6.1-3; CTB Sch 5.2-3, CTB(SPC) Sch 4.1-3]

If capital from the sale of a house is kept for a house purchase, it is not counted for up to six months, or longer if:

- major repairs or adaptations are needed for you to occupy your home
- or the completion of the purchase of your new home is unavoidably delayed."

But it's definitely worth getting it confirmed by the CAB. As RedHelenB says, it's probably not that common so be very careful how you inform the DWP - they often employ temp staff who aren't that experienced and aren't aware of situations that don't occur regularly.

Write and tell them your change in circumstances, but also print out those links and quote the relevant legislation. And send it by recorded delivery or take it into the office to get it a receipt. I've heard too many stories of people getting benefits cut or seemingly falling foul of regulations because of DWP apparently not receiving letters.

We do still owe, but not much. Depending on how far away we are prepared to go, we could pay off the mortgage and still be able to buy a property without a mortgage.

i would think that with 'right to buy' this situation would be more common, as people would have bought properties at a discount, had a fairly small mortgage, and possibly been made redundant but still wanted to sell and move on.

My friend did this without any problem.