AAE Housing Costs

Ask an Expert - Housing Costs - January 2012

Every month, through our Ask an Expert feature, Turn2us users are given the chance to ask a panel of experts their specific questions relating to benefits, grants and managing money.

Your questions answered

We invited you to submit your questions about Housing Costs to the Ask an Expert panel. Here are the answers to a selection of the questions we received.

On this page you will find:

Our experts

Shelter’s National Helpline

The housing and homelessness charity working to alleviate the distress caused by homelessness and bad housing.

Shelter (link opens in a new window)

The Legal Advice Team

Threshold Housing Advice

Threshold Housing Advice merged with Broadway (link opens in a new window) on 1 October 2011

Karen Holmes

Welfare Benefits Specialist

Turn2us

Help with deposit and rent in advance

Where can I get financial help with a deposit on a rented flat? I am on Jobseeker's Allowance as is my boyfriend and we can't afford the deposit. (Vanessa)
Where and how can I fund the deposit and rent advance? Particularly if we are not in a priority group or the council don't have a deposit guarantee scheme. (Chris)

Shelter's National Helpline: Many private landlords will ask for a deposit and at least one month’s rent in advance before they are willing to offer accommodation to a prospective tenant.

Deposits should be protected in an authorised tenancy deposit scheme (link opens in a new window). They should be returned in full at the end of the tenancy unless the landlord has suffered some sort of financial loss.

If you don’t have money for a deposit for private rented accommodation, there may be a rent deposit or bond scheme (link opens in a new window) in your area that can help you. If there is not a scheme in your area or you do not meet the eligibility criteria for a scheme, the landlord may be willing to accept a friend or relative acting as a guarantor - who would be legally obliged to pay your rent in the event that you do not pay it but only for the duration of the contract.

Rent in advance is usually required for at least the first month’s rent. If a tenant cannot provide financial references, then some landlords or agents may ask for even more rent in advance.

If you don’t have money for rent in advance (link opens in a new window), you may be able to get a loan from the Social Fund. There are two types of loan – a Budgeting Loan and a Crisis Loan. The advantage of a Social Fund loan is that although it must be paid back it is interest free. However, Social Fund loans are not available to everyone and even where you meet the eligibility criteria they are discretionary payments. It may be possible to get a local advice agency (link opens in a new window) or private rented sector access scheme (link opens in a new window) to help you with your application or with a review of the decision if your application is refused.

If you are unsuccessful in obtaining a Social Fund loan, you may consider joining a credit union. Credit unions (link opens in a new window) can offer loans to members at affordable interest rates. They are regulated by the Financial Services Authority (link opens in a new window).

You may also want to check whether you would be eligible for a grant from a charitable organisation by carrying out a Grants search on the Turn2us website.

Housing Benefit queries: which council to apply to and do I need accommodation first?

I can afford my one bedroom, privately rented home but my landlord will begin renovations expecting us to vacate the property soon. A more suitable two bedroom property will be more difficult for me to afford. My wife has recently joined me from Kenya and we have had the birth of our first child. I am full-time employed. I live in East Finchley and work in Camden Town but have no other ties apart from employment there. Where should I apply for Housing Benefit - i.e. which council? How much could I expect to be awarded? Do I need to rent accommodation before I can apply? (Declan)

Threshold Legal Advice Team: This is a complicated query, so we will break your query down in to three different parts. Click the links below for more information on each part:

1. Housing Benefit/Local Housing Allowance (LHA)

2. Vacating your current accommodation

3. Homelessness legislation

How do savings affect Housing Benefit

I am not in receipt of any income but am doing voluntary work in London. My rent for a shared room is £90.00 a week. I have savings of £8000. Can I get help for my rent? I live in London. (AM)

Karen Holmes: You mention that you are not in receipt of any income. If you are including income from benefits in that statement then you could be missing out on entitlement to Jobseeker’s Allowance (JSA). Doing voluntary work does not stop you claiming JSA as long as you can show that you are still available for work and willing to take up work on one week's notice.

If you make a claim for JSA your details can be passed on to your local council for a Housing Benefit (England, Scotland, Wales)/Housing Benefit (Northern Ireland) and Council Tax Benefit claim to be made and you could get your maximum entitlement. We don’t have enough details to tell you how much you might get. It depends on your postcode among other things, but you could put your details into our Benefit Calculator to find out your possible entitlement.

Your savings will be taken into account, if you are under Pension Credit age it will be assumed that you have £1 of income per week for every £250 (or part of £250) that you have over £6000. So in your case they will assume £4 of income per week from your savings. This isn’t based on the actual interest you get on your savings, it is just a rule set by government. The rules are slightly different for those over Pension Credit age.

Housing Benefit doesn't cover full rent

I currently receive Housing and Council Tax Benefit as I'm in receipt of Jobseeker's Allowance (JSA). My rent is £534.00/month for a studio flat (includes own shower, toilet and sink, but the kitchen is shared) but I receive £342.08/month benefit. My JSA is £263.60/month so I have £605.68/month benefits minus £534.00 rent leaving me with £71.68/month for living expenses (£17.92/week). I've been trying to do this for over a year now and I think this has to be wrong. Is it? (Jason)

Threshold Legal Advice Team: Unfortunately, it will not be possible to advise you precisely on this issue without knowing your age, your postcode, the date your most recent claim for Housing Benefit (England, Scotland, Wales) Housing Benefit (Northern Ireland)/Local Housing Allowance (LHA) started, the nature of the tenancy you hold and your exact income. The monthly entitlement to Jobseeker’s Allowance (JSA) you quote does not match the personal allowance for a single person, either under or over the age of 25.

We can offer the following general advice. If you rent in the private sector, LHA will only pay the self contained accommodation rate to persons who are over the age of 35 (with certain exceptions). Persons under the age of 35 are restricted to the single room rate (or shared accommodation rate) for the area in which they live. You can check your LHA rate on the Directgov website (link opens in a new window).

As you advised that you share a kitchen with other residents, it is our view that the local authority are treating you as being entitled to the single room rate as opposed to the higher self-contained accommodation rate.

You may be entitled to make an application for Discretionary Housing Payments (DHP) if you are not able to afford to maintain your accommodation due to it being unaffordable. You would need to provide evidence to the local authority as to why this is the case. If a DHP is awarded, then it would normally only be paid for a limited period.

You may also wish to contact your local authority or your local Citizens Advice bureau for further information in relation to your entitlement. You can use the Turn2us Find an Adviser tool to find a local one.

Housing Benefit for shared accommodation

How much Housing Benefit am I entitled to in shared accommodation? (Douglas)

Shelter's National Helpline: If you are living in the private rented sector and claim Housing Benefit (England, Scotland, Wales) Housing Benefit (Northern Ireland) on or after 7 April 2008, your claim will be dealt with under the Local Housing Allowance (LHA) rules.

If you are claiming means-tested benefits such as income-based Jobseeker's Allowance, Income Support or income-related Employment and Support Allowance you will usually receive the full rate of LHA. If you are working but on a low income you may still receive some LHA but you will not get the full rate unless your income is similar or less than you would receive on means-tested benefits.

The shared accommodation rate and other LHA rates are set by the rent officer in the area in which you live. You can check the LHA rates on the Directgov website (link opens in a new window).

If you are living in shared accommodation you will generally get the shared accommodation rate of LHA. Single people under 35 (link opens in a new window) are only entitled to the shared accommodation rate of LHA even when they have self-contained accommodation. This is a recent change as this only affected single people under 25 before 1 January 2012. There are exemptions to the new rule.

Read the rest of this answer

Help with housing costs when living with parents

I'm 27 years old and I hurt my back at work just over a year ago. I got told I couldn't work in that job any more as I wouldn't be able to lift as my back will not be 100% better so i had to find a job with no lifting. I got one but its only 14 hours a week. I am really struggling, I live with my parents but out of my wage I have to pay for my living etc I am just wondering if I am entitled to any benefits? (Emma)

Karen Holmes: Unfortunately, as you only work 14 hours you will not qualify to claim Working Tax Credit, for those in work and on a low income, to boost your earnings.

As you’re working less than 16 hours you could claim Jobseeker’s Allowance (JSA) but you would be unlikely to receive a payment. The first £5 of your income would be ignored but you would only receive a payment of JSA if the rest of your income is less than £67.50. This is the applicable JSA rate for a single person your age and every penny you earn would reduce the benefit by a penny. When working 14 hours this would mean you earning less than the National Minimum Wage (link opens in a new window).

If you had a commercial tenancy for a property you would be able to claim Housing Benefit for help with rent costs, but the situation is different for people living with their parents. Even if you are paying your parents some form of ‘rent’, unless there is a commercial tenancy you will not be considered liable for rent and won’t be able to get help via Housing Benefit. You will also not be considered liable for Council Tax whilst living with your parents in their home, so no Council Tax Benefit entitlement.

From the details we have it seems that you would not be entitled to any means tested benefits, however, depending on the nature of your injury and it's affect on you, you may want to sit down with a benefits adviser to fully discuss disability benefit entitlement and your situation. You can use our Find an Adviser tool.

If there is a particular item you need help to purchase, or you just need some assistance while you get back on your feet, you may be able to access a grant from a charitable fund. You can use our Grants Search to locate possible funds that could help you.

Though the government believes you should need no more than £67.50 per week for living expenses, food, utility bills etc if you can't increase your income and are struggling you may want to seek advice from the Money Advice Service (link opens in a new window) about budgeting and managing your money.

Housing costs and separation

I am 52 yrs old am splitting up from husband and have to leave the rented property we both share. I am unable to fund a rented house of my own as I am on low income - despite working maximum hours I can as a teaching assistant. I started the job in July 2011 and will earn around £7,200 up to April 2012. Will I be able to get any help or Housing Benefit? I have no dependants. (Denise)

Threshold Legal Advice Team: This is a complicated query, so we will break it down in to three different parts. Click the links below for more information on each part:

1. Tenancy rights and obligations

2. Housing Benefit entitlement

3. Working Tax Credit entitlement

I want to leave my husband but have no money and a 2 year old child. He is in the navy and we live in forces accommodation in Cornwall. All my family live in the Redhill/Newbury area so I'm very alone and cut off. None have room for me and my son to move in. What can I do? I'm trapped. (Nicola)

Shelter's National Helpline: I’m sorry to hear about the problems you are having at home, it can be difficult to know what your rights are when a relationship ends. You can use our relationship breakdown checker to see what your rights might be.

I can give you some initial advice about your housing options in this situation but I recommend you speak to someone before you decide what to do next. Agencies such as Rights of Women are available and provide free confidential legal advice to women. It is a women’s voluntary organisation committed to informing, educating and empowering women concerning their legal rights. They also offer specialist advice in family law, divorce and relationship breakdown, children and contact issues.

Click on the links below for initial advice on:

Housing Benefit and taking a job

I have had an interview for a part-time post in a school at the moment I'm a single parent with one child at home and one at university. I am in receipt of Housing Benefit £900 per month and Council Tax Benefit £130 approx. I have no other income apart from Child Benefit and Child Tax Credit which amount to approx £350. The job will be approx £200 per month pro rata, how would this affect my Housing Benefit and is there some kind of top up scheme. My fear is I would be considerably worse off, I am in debt as my family are lending me money to keep afloat. (Helena)

Karen Holmes: We didn’t have enough information from your question to work out exactly how your Housing Benefit (England, Scotland, Wales) Housing Benefit (Northern Ireland) would be affected by taking up employment. What we would advise is that you put your details into our Benefit Calculator imagining that you have taken the job, this will produce a results table with your benefit entitlement. You can then compare this, plus your income from employment, with your current income from benefits.

Finding out whether you are ‘better off’ in work is complex as it’s not just about losing benefits or having them reduced, there are in work benefits such as Working Tax Credit which you may become entitled to. It is also important to remember that there are non financial benefits of being in work but there are also often over looked costs of gaining employment, such as travel to work and childcare. We would suggest finding a benefits adviser to sit down with to make sure you have covered all bases when making your decision. You can use our Find an Adviser tool to find a local one.

Help to pay service charges

Is there any help for service charges in leasehold flats? I have a £3,500 service charge that I cannot pay and really don't know what to do. I don't have a mortgage on the property, and am on disability benefits so not in a position to borrow money. (Judith)

Threshold Legal Advice Team: The starting point is to determine if the correct procedure has been followed in making the service charge. You can obtain further assistance on this point for free from an organisation called Leasehold Advice Centre (link opens in a new window). However, they will be unable to assist you in relation to what the Department of Work and Pensions will potentially pay.

It is difficult to advise without knowing what benefits you currently receive, ie, if you are in receipt of Income Support, income-related Employment and Support Allowance, income-based Jobseeker's Allowance or Pension Credit.

If you are in receipt of one of the above benefits the Department for Work and Pensions (DWP) are familiar with routine service charges, for example, if the freeholder of the property of which you hold a lease arranges for the exterior of the building to be painted and you are obliged to pay your share of the cost. In such cases, generally speaking, the DWP will pay this. Service charges which cover minor repairs and maintenance are eligible. However, the situation is more complex if the repairs are viewed as improvements, such as repairs to heating systems, damp proofing, replacing windows, repairing unsafe structural defects. These service charges will not be covered. Read the full answer including more about how the DWP can help.

It is also important to point out that if you are unable to pay the service charges, you could be placing yourself at risk of forfeiture of the lease. It is vital that you seek further legal advice if this occurs. You can use our Find an Adviser tool to find a local adviser. However, If your freeholder is a local authority they may be able to suggest other options to you and you should contact them directly.

Grants for furnishing accommodation

I've just been allocated a new council home. There are no white goods etc and I have a family. I receive high rate Disability Living Allowance and am registered disabled. I am 57 yrs old and currently rent a part-furnished flat and cash is very tight. Is there a council/charity grant available which would let me buy a fridge, washing machine/white goods for our new home? (George)

Karen Holmes: You don’t mention whether you are currently in work or on benefits. If you are getting certain benefits you may be able to apply for a Community Care Grant from the Social Fund. You would need to show that the situation is putting exceptional pressure on you and your family which the grant would ease. If successful you would not have to repay the amount of the grant awarded.

The Social Fund also includes Budgeting Loans for people getting certain benefits who are less able to save for big expenses such as replacing white goods. This would have to be repaid but is an interest free loan. If you qualify you should try and claim a Community Care Grant first as it doesn't have to be repaid. We advise that you get help to make the application so that you include all relevant details.

If you are not getting one of the benefits which allows you to claim the assistance mentioned, you could still get help from a charitable fund. Our Grants Search helps you find any relevant charities from a database of over 3000 funds.

Support for Mortgage Interest (SMI)

My question is regarding the help I get off the goverment regarding my mortgage. I currently receive £168 towards my mortgage and I pay £223 month. I am a single mum with a disabled little boy of seven years old. Could you tell me if the amount they put towards my mortgage is going to change? (Lesley)
I am a 56 year old disabled woman and was recently diagnosed with multiple sclerosis. Although I am getting Disability Living Allowance high rate care and mobility I find myself with very little money as I have to pay £200 per month towards my mortgage because of changes to help with mortgage interest from October 2010. This is causing me a lot of distress and hardship, is there any help? (Margaret)

Shelter's National Helpline: From 1 October 2010 the government changed the standard interest rate that it paid direct to a mortgage lender as part of a Support for Mortgage Interest (SMI) claim. The rate (link opens in a new window) is now set at a level equal to the Bank of England’s published ‘monthly average mortgage interest rate’, and has reduced significantly to 3.63 %. This rate has been in place since October 2010, but in theory should change to reflect the average mortgage available on the market.

In certain circumstances an individual may be able to move home, whilst still in receipt of SMI, provided that the new mortgage is for no more than your current mortgage. SMI will then pay for the new mortgage. This may be worth considering if your current home is unaffordable, particularly if you are in a position to downsize. There are lots of factors that you would need to consider, such as whether you could sell your home, whether you have repayment fees to pay with your current lender, whether you have equity in your home and importantly whether a new mortgage would be more affordable to you. You can search for an independent financial advisor (link opens in a new window) who should be able to advise you of your options.

You may also want to check whether you would be eligible for a grant from a charitable organisation to help with your increased housing costs, or living costs, by carrying out a Grants Search on the Turn2us website.

For more help with your housing problem you could search for a local advice agency (link opens in a new window) or for more help with budgeting and managing your finances you could get help online from the Money Advice Service (link opens in a new window).

Unable to afford mortgage payments

I am unemployed. I have been told that as my wife's small income of £713 pm and my small quarterly pension of £571 exceeds the benefit threshold that I am not entitled to income-based Jobseeker's Allowance and, hence, other benefits including assistance with my mortgage interest. I am struggling to meet the minimum mortgage payment of £500 which my building society have insisted upon each month. Obviously we now have mortgage arrears. Both my wife and I are diabetics and I am insulin dependent. Although we receive prescriptions, we do not have dental cover and only a small amount towards glasses. My eyesight is complicated and I simply do not have the money for the cost of new glasses. I am aged 60 and my wife 57 and am wondering whether we are entitled to any sort of benefits other than the Working Tax Credit which we have applied for? Is there any sort of scheme to assist us with our mortgage arrears? (Mark)

Shelter's National Helpline: Although you have outlined what your housing situation is, you haven’t said whether you would like to remain in your current home or move elsewhere. We will advise you on both possibilities and possible benefits entitlement:

If you would like to stay in your own home

If you would like to leave your home and move elsewhere

Benefit Entitlement

I am 65 years of age and still have 5 years left to pay of my mortgage approx £42,000. My husband had to retire 16 years ago due to ill health. We've used up all our savings to pay our monthly payments. Are there any benefits/help available which would enable us to stay in our home? (Elizabeth)

Threshold Legal Advice Team: The first thing you may wish to consider is negotiating with the lender to have the terms and conditions of the mortgage changed, i.e. have it changed to interest only.

Unfortunately, we are unable to respond in full to your query without knowing the type of benefit that you and your husband are currently claiming, if any. We also do not know the age of your husband. If you qualify for Pension Credit, you might be able to claim mortgage interest payments of ‘eligible’ debt straight away. You would make the claim with the Department of Work and Pensions (DWP). This is a complex area and in some cases payments might cover the amount of interest you are liable for, however, this is not always the case and you may get less than you require.

If there is a shortfall in any amount that you might receive from the DWP and your actual interest payments, lenders are sometimes ‘reluctant’ to accept payments that do not meet the minimum interest due unless you can convince the lender that this will change in the very near future. However, being a pensioner this might prove difficult. You should also obtain money advice in order to renegotiate other debts (if any exist), and check that you are receiving all the benefits that you are entitled to. You can use the Turn2us Benefit Calculator to check this.

If there is large equity in the property, you might like to consider downsizing to a smaller property. Some lenders are able to assist with this. As a last resort, you could approach your local authority to enquiry about the Mortgage Rescue Scheme (link opens in a new window). Depending on the value, and location of the property, you might qualify for this scheme. If this is the case, the local authority might decide to buy the property on your behalf. You will remain living in the property as a tenant. Initially you might be given a three year tenancy and this will be reviewed when it expires. Under the scheme you will be allowed to remain in the property as a tenant. The authority will charge you for reasonable rent and you might be eligible for Housing Benefit (England, Scotland, Wales)/Housing Benefit (Northern Ireland) to cover this. You may also contact the Department for Communities and Local Government (link opens in a new window) as they might be able to offer more information, and who to contact in your borough.

If none of the above is possible, you may need to consider selling the property in order to avoid being repossessed.

If you are forced to sell as you have no other option, and this results in negative equity, then the local authority may assist you with housing either through their homeless queue or their sheltered schemes. However, if there is a large equity, and you end up with large capital after selling, you might need to live in the private rented sector as you might be excluded from making a homeless application due to having excess capital under your local authority’s Housing Allocation Scheme.

Further Help

Disclaimer:

The opinions expressed are those of the expert only. The answers and associated material are for general information only and do not constitute financial, legal or other form of advice. You should not rely on this information as an alternative to financial, legal or professional advice from a qualified professional for your own particular situation. The answers are given in response to specific questions submitted by other users. You should not rely on this information alone to make (or refrain from making) any decisions.

Whilst effort has been taken to ensure the accuracy of the information, Turn2us does not accept any liability for this information. It is the responsibility of users to check the accuracy of relevant facts and opinions given as part of any answer before entering into any commitment based upon the information given.

Date of publication: 1 February 2012

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