LIFT Scheme & Housing Beneift

[pipsaholic]

Is housing and council tax benefit available for properties under the lift scheme shared ownership with part owned by the government?

[Madameloco]

Hi PIPSAHOLIC,

Firstly, the LIFT scheme is brilliant for people on low incomes or on disability benefits.

It isn't actually shared ownership. It is shared equity. So basically you don't pay any rent. You only pay a mortgage. For example you find a home for 80k you take a 60% stake and the government take a 40% stake. You then get a mortgage for 48000 and that's all you pay, so your monthly payment would be around £171 a month without a deposit. This is all approximations and you could add a deposit to that too.

You can't get any housing benefit to cover any of your mortgage payments. The only "benefit" available is support for mortgage interest (SFMI). But as of 2017 this is now treated as a loan so you do have to pay it back if you go back to work or come off disability. Also you can ONLY apply/get this benefit after having your home/mortgage for 9 months.

My source of knowledge is from buying my own home via LIFT as I have a disability and I was in social housing in a terrible block and it was horrific. The stress endured was terrible so I found the LIFT scheme. I pay for my mortgage from my low income/disability benefit. I wouldn't take SFMI as it's a loan and not really assistance.

Words of advice:
Although you'll be paying a low monthly mortgage you have to factor in cost of your home insurance, life insurance, repairs and maintenance of your home.

Also you have to be very careful about your choice of home. There are price thresholds that LIFT set and being honest most of the property will be ex council or in that bracket of affordability. So you need to be careful about the area and where you buy etc. Because if you end up with horrendous neighbours or dont like your property in the end you will be a bit stuck. You could sell it again but it isn't as easy as doing it non shared equity. You also can't use the scheme twice. So you need to intend to stay there for quite a few years until you either have the money to sell and get a "standard" mortgage or downsize etc. In saying that, the scheme is brilliant for people with disabilities as we tend to be forgotten about when it comes to buying our own house.

If you choose a financial advisor to help with your mortgage etc. Look for someone who knows about the help to buy scheme and LIFT. These can be hard to find and some advisors don't have a clue about LIFT and will tell you "you can't get a mortgage on benefits" but this is a lie. You can obtain a specific mortgage tailored to a disabled person on disability benefit.

One last bit of advice is that the DWP (if you're receiving IR ESA) WILL ask you how you obtained your own property when you call to tell them your change of address, especially if you're currently in rented property. They often ask for proof and that is when you show them all your LIFT documents etc because it is all legal

and allowed even if they try to say it isn't (inexperienced advisors who don't know about help to buy etc). If you've used any capital/savings towards your deposit etc. You usually need a good reason for obtaining the property too if you were adequately housed before I.e. Needed to move due to mobility, anti-social neighbours, house isn't big enough for your medical equipment or your carer coming to stay etc.

Sorry I have given you a mountain of advice and you only asked one question but hopefully this will help anyone else in the disabled/illness community who are looking at home ownership.

[des8]

The Council Tax Reduction Scheme (CTRS) replaced Council Tax Benefit in 2013 in Scotland
You can claim a Council Tax reduction if you meet all the following

• savings of less than £16,000
• responsible for paying the Council Tax bill
• have a low income from benefits or work, including self employment.

[pipsaholic]

Great info MADAMELOCO

I called them up and they told me you still need bank lender to approve the LIFT scheme you need to meet their criteria so In my view it was just like a normal mortgage process.

You mentioned about SMI payments from DWP. What if your on indefinite long term benefits? Also, is the loan repayment interest free?

Do you not make another separate payment to increase your share year by year?

[Madameloco]

Pipsaholic yes you do still need a standard mortgage but it will obviously be a small one. It depends where you live but if you could get a cheap flat for example you could take a 60% stake or as low as a 51% stake and your mortgage could be very low. Myself and people I know who used LIFT all have our full mortgage under 40k. You could apply for a decision in principle and find out how much mortgage you can get.
This is when financial or mortgage advisors come in handy, usually independent companies not the advisors from the banks or mortgage companies. The independent companies can help assess how much o a mortgage you can go for and the lenders that would lend to people on disability benefits.

SMI can be forever technically if you don't get better or come of disability benefits. It used to be called something else and you used to get your mortgage or part of paid for you and it wasn't a loan. That has since been replaced. But remember you have to have had your mortgage for 9 months and not be in arrears etc.

SMI does have interest. It is 1.7 (I think) at the moment but it is always subject to change. You do also have to have a qualifying benefit such as the means tested Income related ESA, universal credit, income support.

You can live in the house for the next 40 years and never increase your stake. You can pay off your mortgage and the government would still have the 40% stake they invested. But obviously if you sell you have to pay the governments stake fully as in the 40% and whatever is leftover goes towards your own stake.

If you will be on disability benefit long term, you plan to stay in your new home for over a period of at least the next 5 years then financially it will work for you.

Remember you also have your solicitor fees to pay for buying aswell. This can be anywhere from £1500 to £3000 and LIFT asks you for proof that you can pay for your solicitor fee.

They also check 3 months of bank statements and as they are government run if they see sudden drops in capital/savings they will need proof of why .

[Madameloco]

As Des8 said you will still get help with council tax. Exemption most likely if you have a considerable disability and on disability benefits.

[pipsaholic]

As low as 51% stake! Government own 49%?

9 months on a regular mortgage then LIFT scheme?

I have a good solicitor who could get me a good deal. Do you have to go with a LIFT solicitor or any?

[Madameloco]

Yes to the stakes. You have to apply through LIFT first then once they grant the government stake you then get your mortgage but you have to have a decision in principle when you apply to LIFT.

No you go with any solicitor you choose. LIFT don't actually supply you with a solicitor you have to find one yourself.

It is quite a long process but when you get handed those keys at the end it's an achievement.

[pipsaholic]

They say minimum you require mortgage is 60% of house value. They said most bank lenders accept the LIFT scheme. They said you can hire your own solicitor for conveyancing. I heard you can do it online which is cheaper and it's about £400-600 depending on property value. They stated they need the currently household income rather than individual income?

There's an over 60's scheme apparently you can get a mortgage with the LIFT scheme WITHOUT a mortgage but you have to give up your savings and selling your home to use to fund the new home. What happens if you don't have any savings and you rent? You need a good reason for moving for me its Harassment from neighbours.

[pipsaholic]

Hi, you mentioned no deposit, did you manage to get the house with no deposit? Did you have to sell your existing home to fund the new one?