Can you get universal credit if you own a property?
You could get universal credit (UC) if you own your home.
UC can help with your basic living costs if you have a low income.
Help with mortgage costs
UC does not help with mortgage costs or secured loan repayments.
After 3 months on UC you could apply for a support for mortgage interest (SMI) loan.
You must pay the loan back when you sell your home or transfer it to someone else.
You do not have to make monthly repayments on the loan.
Always get independent advice from a financial adviser or solicitor before you apply.
Information from the Department for Work and Pensions (DWP) is not independent advice.
More about support for mortgage interest (SMI) loans.
Rent and service charges in shared ownership
UC has a housing element that can help with rent and some service charges.
It only helps with service charges that you have to pay under the lease and are on this list:
external repairs to the building
cleaning, heating or repairs in communal areas
waste collection, lift repairs and door entry systems
external window cleaning - but not for ground floor properties
essential items that come with the property
Service charges for other leaseholders
UC can help with the same types of service charges if you are a leaseholder.
But you can only get this help if:
you have been getting UC for at least 9 months
you had no earned income during that time
If you own a property that you do not live in
A property that you do not live in could affect the amount of UC you get.
The DWP looks at:
how much your property is worth
money you get from it if it's rented out
You cannot usually get any UC if your share of property is worth more than £16,000.
How does the DWP decide the value of your property?
The DWP looks at how much the property would sell for and then:
deducts money you still owe for the mortgage or any secured loans
takes off 10% of your property's value for sales costs
When is the value of your property ignored?
The value of your home is ignored if you live in it.
Moving out for a time
Your home can be ignored if you do not live there right now but intend to move back in.
For example, if:
you go into residential care but plan to move back home again
you're staying in a domestic abuse refuge but plan to return home when it's safe
If your partner lives there
Your home is ignored for as long as your partner lives there but you have to live somewhere else. For example, in long term residential care.
If a close relative lives there
Your property is ignored for as long as a close relative lives there who has either:
reached pension age
limited capability for work
'Limited capability for work' means they cannot work because of disability or health.
A close relative means your parent, child, brother or sister. Step-relations and in-laws count.
If you split up with your partner
Your former home is ignored in these situations:
as long as your ex partner lives there as a single parent
you moved out in the last 6 months after a break up
you've taken steps to sell the property in the last 6 months
The DWP can ignore it for more than 6 months if you do everything you can to try and sell.
They can also ignore money from a sale for up to 6 months if you plan to buy another home with it.
Example: how long a former home can be ignored for
Sarah and Jimmy are getting divorced.
They own a flat together. They have no children or savings.
Jimmy moves out and claims UC. His former home is ignored for 6 months.
A few months later Sarah and Jimmy agree to sell the flat. They agree to split any money from the sale after paying off the mortgage.
They both speak to solicitors and ask an estate agent to put the flat on the market. Jimmy's former home is ignored for another 6 months from when they do this.
The flat is advertised at a reasonable market price but is slow to sell. The DWP agree to ignore it for longer.
When the flat is sold Jimmy gets £7,000 after paying off the mortgage. This is not enough to buy a new property.
The DWP start to count some of this money as savings. His UC payments go down.
Other money or savings
Property, money, savings and investments can all count as 'capital'.
The DWP look at all these things together when working out:
if you can get UC
how much you get
Need more advice?
Last updated: 20 December 2024
