That is the question facing the increasing number of people with a learning disability who own a home of their own. But they do not have to lose out, explains Daron Billings...
Until recently it was virtually impossible to buy a home of your own if you had a disability and relied on benefits as your main source of income. But over the last 10 years or so this has all changed.
At MySafeHome we have found that, as more people make this move, growing numbers are faced witha dilemma: to work or not to work? If they don't work they will often receive support for mortgage interest (SMI), which covers the payments on the interest only mortgages that we help to arrange. But by not working, they miss out on the independence, satisfaction and companionship that a job brings. Having paid employment does not always mean that people are better off financially. If they work for more than 15 hours per week in paid employment they face losing their SMI. This causes a number of problems. People who currently work for more than 15 hours per week and who then want to buy a home of their own potentially face having to give up their job and falling back on benefits. People who have already made the big move into a place of their own and who - as a result - have found their confidence and skills have increased, are discouraged from looking for paid work. There is, however, a solution to this dilemma. Instead of purchasing a large share of their new home (our model relies on shared ownership, normally with a housing association) they buy a smaller percentage (at present 25% is the minimum). This means that the capital repayment mortgage would becomfortably within their budget (for buyers without an income andsavings, mortgages are generally arranged on an interest onlybasis). If their earnings increase they are free to increase their stake in their new home, giving them both the incentive and flexibility to carry on developing their career. At present just four percent of the buyers we help work for more than 15 hours per week in paid employment. To date, not one has fallen behind on their payments, despite several losing their jobs in the economic downturn. In these cases the buyer's savings have been used and alterations to the terms of the mortgage - making them interest only - have also been made.
Working it out
Of course, care must always be taken to ensure that a paid job is right for the individual: financially and practically. It is vitally important to seek advice from a benefits professional, especially if people rely on these payments to cover their accommodation and living costs and are unsure if their potential salary will be sufficient. If they have not worked before they could try a part-time role of less than 15 hours per week. If they like it they can always add more hours and then modify their mortgage to take their new circumstances into account. The main message is simple: the rules and regulations around benefits should not get in the way of someone having the career and the home they deserve. While it might take a little more thinking about, employment really can work for people with learning disabilities.
Katie is a young woman with Down's syndrome who lived at home with her parents. She also had a jobthat she loved, working at a local hotel for 20 hours per week. Itgave her independence, purpose and a chance to socialise with otherpeople. It also gave her an income, enabling her to save. Katie wasparticularly good at managing her own money and with a little helpfrom her parents she had been able to accumulate a respectable sum.Knowing that she wanted to live near to her family, but also awarethat house prices in the area were relatively high, her mother Lynne heard about New Build HomeBuy from another parent who had already helped their child buy a home of their own. Lynne got intouch with us to see if Katie might be eligible for a mortgage and,after confirming that she would be, the family started looking forher new home. New Build HomeBuy properties are generally built andoffered to key workers who could not otherwise be able to afford tobuy. What many people still do not realise is that people with adisability are often also eligible to buy these properties on ashared ownership basis in which they buy a percentage of their newhome with a mortgage and a housing association buys the rest (rentis payable on this portion). Katie found the perfect one-bedapartment within a mile of her parents, available to buy withServite Housing Association. As she was working for more than 15hours per week in paid employment she was not entitled to SMI. However she was still entitled to housing benefit.
How the figures add up
The property sale price was £138,000 for a100% share. Katie purchased a 40% share of her new home for£55,200. This is a lower percentage than many of our buyers but itmakes the mortgage repayments affordable for Katie (we can, ofcourse, organise mortgages for 100% of the value of the propertybut affordability is vital). Katie and her parents were able tomake a deposit of £20,200. A capital repayment mortgage of £35,000was taken out with Kent Reliance Building Society over 25 years.This costs Katie £147 per month (as of February 2010). There wereadditional purchasing costs of £3,500 plus £3,000 which was usedfor new furnishings. This came from Katie's savings. The monthlyrent payable to Servite Housing (on their 60% share of Katie'shome) costs £260.00. This includes building insurance and a servicecharge for communal areas. Katie is responsible for the maintenanceand repairs on her new home (many of our buyers modify their leaseso that the housing association is responsible for this). As it isa new property and comes with a 10-year National House BuildingCouncil guarantee, the risk of any costly repairs is minimal.Before moving, Katie had a weekly disposable income of £229.73 fromher salary, DLA care, DLA mobility and working tax credit. Aftermoving, her net weekly income (thanks to the addition of housing benefit) had only dropped by just under £50, even after factoringin her £147 per month mortgage payments and contents insurance. So,for a personal outlay of less than £50 per week, Katie has a homeof her own with all the freedom and long-term security that itbrings. Most importantly of all is the fact that she's been able todo all of this without giving up the job she loves. Katie says: "Ireally enjoy working because there are lots of friendly staff. Thepeople I work for are very good and I get to meet people I knowaround the hotel. I hope I will be here for many years and inspireother people with a learning disability to get jobs in this sort ofarea. I like pay days too!" Katie's advice for other people in asimilar situation who want to work is: "Take it slowly andsteadily. Eventually you can get yourself a nice flat or house ofyour own and reach your goal to be independent and get your ownjob. You can inspire other people as well." When she is not workingat the hotel, Katie now also works with her support organisation,Dimensions, by attending meetings and helping to givepresentations. She even has her eyes on a future in event planning.[/box]
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