In this brief guide we are going to answer the question “ can you claim benefits if you own a house “ so you can be well informed when deciding on homeownership. 

Can you claim benefits if you own a house?

Yes, you can claim benefits if you own a house but you can’t usually claim housing benefits.

To claim Housing Benefit you usually have to:

have a low income or be claiming other benefits

be at least 16 years old – if you’ve been in care you’ll need to be at least 18

have less than £16,000 in savings

If your house is mortgaged

Yes, you can claim benefits if you own a house and your house is mortgaged. If your house is mortgaged then you can claim benefits to help you with the costs of owning your house such as the mortgage interest. You may be able to claim for benefits such as the mortgage support interest. This benefit is actually a loan which accrues interest and is repayable. In other to get the support for mortgage interest help you will have to already be claiming other benefits such as Pension Credit (guarantee credit), Income Support, Jobseeker’s Allowance (income-based) or Employment and Support Allowance (income-related)

You will usually need to have been on benefits for the past 39 weeks without any breaks to claim Support for mortgage interest.

“If you qualify for an SMI loan, you can get help paying the interest on up to £200,000 of your loan or mortgage.

The amount you get is based on a set rate of interest on what’s left of your mortgage. It’s paid directly to your lender.

You’ll need to repay your SMI loan back with interest when you sell or transfer ownership of your home.”

If your house is a shared ownership 

Yes, you can claim benefits if you own a house through the shared ownership scheme. You will be able to claim Housing Benefit or Universal Credit Housing Costs element for the rent and any service charges which are part of your monthly repayments and a Support for Mortgage Interest loan to help with the mortgage interest on your mortgage.

You will usually need to have been on benefits for the past 39 weeks without any breaks to claim Support for mortgage interest.

“If you qualify for an SMI loan, you can get help paying the interest on up to £200,000 of your loan or mortgage.

The amount you get is based on a set rate of interest on what’s left of your mortgage. It’s paid directly to your lender.

You’ll need to repay your SMI loan back with interest when you sell or transfer ownership of your home.”

If your house is owned outright

Yes, you can claim benefits if you own a house and your house is owned outright If you own your house outright then you may also still be able to claim other benefits such as income support, job seekers allowance etc but you will not be able to claim any housing benefit. You will also still be able to claim support for mortgage interest as support for mortgage interest covers the interest costs of not only mortgages but also:

A loan which was  taken out to pay a service charge for essential repairs/improvements 

A loan which was  taken out to pay for certain essential repairs/improvements directly

You will usually need to have been on benefits for the past 39 weeks without any breaks to claim Support for mortgage interest.

“If you qualify for an SMI loan, you can get help paying the interest on up to £200,000 of your loan or mortgage.

The amount you get is based on a set rate of interest on what’s left of your mortgage. It’s paid directly to your lender.

You’ll need to repay your SMI loan back with interest when you sell or transfer ownership of your home.”

If you own your house or are living with a partner who owns their house  and you are eligible for universal credit then you can get universal credit payments which can go towards your home

The Universal payment can go towards:

the cost of buying your property

home insurance

repairs and maintenance

It can also help you pay for service charges, including:

using shared facilities, such as rubbish collection or communal lifts

window cleaning of upper floors

FAQs: Can you claim benefits if you own a house.

Below we are going to look at some of the most frequently asked questions around if you can claim benefits if you own a house.

Can you claim benefits if you own your house outright?

If you own your house outright you may still be able to get other benefits but not housing benefit. If you are eligible for universal credit then you could attribute some of these universal credit payments towards your housing costs.

If you own your house outright you are also able to claim a benefit known as the support for mortgage interest to help you cover the cost of your mortgage interest. This is a repayable interest accrued loan.

Can I claim benefits if I have a mortgage?

If you have a mortgage you will still be able to claim benefits such as income support or jobseekers allowance but you won’t be able to claim housing benefits. You will instead be able to claim support for mortgage interest to cover the cost of the mortgage interest being charged on your mortgage.

You will usually have to have been on benefits for the past 39 weeks without a break to claim SMI. SMI is offered as a repayable loan.

Can you claim Universal Credit when living with parents?

You won’t be able to get universal credit housing costs or housing benefits for rent you pay to a close family member you live with.

People who count as close family members are your: parents, parents-in-law or step-parents. child, step-child or son or daughter-in-law.

Can you claim universal credits if you own your own house?

Yes, you can claim universal credit if you own a house and are eligible for universal credit.

This could be outright, through a mortgage or with a shared ownership scheme. You will usually need to have been receiving benefits for the past 39 consecutive weeks.

Government schemes which can help you buy a house

There are lots of government schemes which may be able to help you buy a house even if you are on benefits, they include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy– allows you to buy your home at a discount price.
  • Preserved right to buy- same as above.
  • Right to acquire- same as above.

Using a mortgage broker to move house

You may want to consider using an independent mortgage broker to get a mortgage for a house.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide we answer the question “ can you claim benefits if you own a house “ If you have any further questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.