benefits and negative equity

[nam207]

Hi,

My husband is leaving me and our 1 year old son. I'm currently a sahm having given up work when I couldn't reduce my hours after maternity leave so have no income.

We currently live in rented accommodation in the southwest, having moved here with work 4 years ago. However I do own a small 1 bedroom flat in the southeast which I can't sell due to negative equity. I do rent the flat out but make no money profit as the rent only covers the mortgage and service charges.

Does anyone know how owning the flat will impact on me being able to claim housing benefit or income support?

Thank you.

I am not an expert but i think that you cannot claim housing benfit whilst owning and renting out that property. You would either have to sell or move back thier. sorry if this is not what you wanted to hear op.

Yes you can still claim Housing Benefit. Your property will be independently valued and any equity will be counted as capital. Any rental income would also be taken into account when assessing your income. However if you are in negative equity and not making any profit from your rental income then you can still claim Housing Benefit.

I was in a similar position when I moved area. Our old house was in negative equity and we were renting.

I can't remember who we approached (local gov housing benefit office?) but I outlined our situation by email. Including that we basically couldn't afford to sell it. They replied that I may still be eligible but I would need a lot of documentation as to valuation, evidence of mortgage etc to prove it was in negative eqquity.

This was a few years ago so may have changed and luckily our fortunes changed. CAB weren't very helpful as they didn't have specific advice. Can you email local housing dept?

Thanks. I will email the local housing people and see what they say.

I will move back if I have to bit obviously a small third floor flat with one bedroom isn't ideal with a soon to be toddler. I've also now made a life for myself elsewhere.

I just wish the housing market would pick up so I could sell it.

Nam I've been in the same situation recently - is the mortgage for the flat on interest only or capital repayment? Basically the income from renting the flat is included in your income, minus the mortgage interest payments, and minus any other payments you are still liable for (ground rent and service charge were the 2 that affected us) but NOT minus the capital payments off the mortgage.

For me and DH it wasn't worth claiming in the end - DH works on a low income and the mortgage company wouldn't let us change to interest only so the "extra" we were getting from tenants took us over the HB threshold even though all it was doing was paying the mortgage.

In all honesty we are thinking about just cutting our losses, selling in negative equity and the bank will put the remainder on a personal loan - not convinced that where our flat is will increase in value any time soon!

Hi sorry for taking such a long time to see your reply. That's really helpful. The mortgage is interest only so maybe I'll be ok. I have a face to face appointment with cab on 8 August so will see what they say.

I hadn't realized you could do the personal loan thing for the remainder of the mortgage. Maybe I'll have a think about that too.