In this brief blog, we are going to discuss low-income housing in the UK.

low-income housing

Many people in the UK are regarded as having low-incomes. You have no income or a low-income, and no more than £16,000 in savings. you’re not in full-time paid work (you can work less than 16 hours a week, and your partner can work less than 24 hours a week).

This means that many people on low-incomes can’t support their families, pay their monthly bills and live a normal life on the salaries they have. Finding a low-income housing provider will, therefore, be a great option for those who don’t have anywhere to live.

low-income housing can either be bought or rented out depending on the provider. In some cases, providers will allow you to rent low-income housing unit for a fixed period before going on to purchase it. This ensures you can save enough money to put down a mortgage deposit and get a mortgage.

Interestingly enough, low-income housing is something which has a lot of demand in the UK and there are lots of people looking to purchase or rent their own low-income housing unit.

What is low-income Housing?

low-income housing, as the name gives away is housing which is targeted at those with low-incomes or no incomes.

In most developed countries, low-income housing is provided by the state through its local councils or regions. low-income houses will usually be owned by councils, housing associations and even charities.

low-income housing will usually be built on brownfield sites which were previously used by companies for factories, offices, etc

Are you eligible for low-income housing?

You eligibility for low-income housing will depend mainly on the income you currently generate. It may also depend on the benefits you are claiming. You may receive housing benefit which allows you to afford housing in the UK. This is a form of low-income housing.

The housing benefit is not directly paid to you but rather the landlord of the house you are currently residing in.

You can claim for housing benefit if you are a single parent, individual or family which cannot work for whatever reason

If you are a single parent or part of a partnership looking after children whilst out of work. The criteria is very much dependent on that set forth by your local authority so it is best to seek their advice.

Whether you will be eligible for low-income housing may vary on your local council and circumstances. 

For example if you are homeless, a single parent with a child then getting low-income housing may be much easier than if you are unemployed or retired.

Your personal circumstances will be the main determining factor used when assessing your claim for low-income housing.

Where Might the low-income Housing be located?

Based on your local authority the low-income housing could be part of a housing association scheme nearby or a council flat within your local council. You will always be asked to view the low-income housing units before you decide if you want to move in or not.

You don’t have to agree to move into any low-income housing especially if you’re not satisfied with its location or quality.

Rejecting a low-income housing property will almost certainly increase your waiting time before any other suitable property is located for you.

How to apply for low-income housing

To apply for low-income housing you should first contact your local council to see if you are eligible for any of the low-income housing units which they have available.

In most cases, if you already receive universal credit or other benefits then you may already be eligible for low-income housing but you should still carry out checks to ensure you are indeed eligible.

If you are still uncertain if you are eligible for low-income housing then you should contact your local Citizens Advice Bureau for more guidance.

Government schemes for low-income housing

You may be able to use some of the government schemes below in order t o get low-income housing.

  • 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.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

In this brief guide we discussed low-income housing in the UK if you have any 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.