Buying or Building a House with No Grant Assistance

Where to Get Information

There are a variety of places to get information on buying a house in West Lothian.  The Edinburgh Solicitors Property Centre has an extensive portfolio for West Lothian and can be contacted on 0131 624 8000 or espc website (opens new window).  In addition, there are numerous Estate Agents throughout West Lothian offering properties in a variety of locations. Most properties for sale can be found on the Rightmove website (opens new window) .

Sheltered or retirement housing is a development of purpose-built homes with certain amenities.   A development could be a block of flats, or could consist of individual or linked bungalows.   Some developments contain both.   Amenities could include communal facilities such as a lounge, laundry and guest bedroom (s).   In most developments there will be an emergency alarm system and or the services of a warden who may or may not be resident.   The warden may be given a different name, such as social or residents' secretary.  The main duty of a warden is to act as a good neighbour, to summon help in an emergency and to ensure that the common areas are looked after.   Provision will be made for the cleaning, maintenance and insurance of the communal parts.   All the services and amenities will be paid for by a service charge.

Disabled people without an income may be able to gain a mortgage if they need to move to a more suitable property and rely on state benefits for all, or the significant majority, of their income. In such cases much of the cost of buying can be met from the following qualifying benefits, in particular from:

• Income Support
• Income Based Job Seekers Allowance (IBJSA)
• Pension Credit - guarantee credit only

A disabled person, or someone whose household includes a disabled person, who is eligible for one of the means-tested benefits above and needs to buy a property more suited to a disabled person's needs may qualify for help with buying a house. This help comes in the form of additional benefits to cover the interest paid on a mortgage. The extra benefit is commonly known as 'housing costs' or 'Income Support Mortgage Interest' (ISMI) payments.

ISMI payments are normally a safety net for people who have an existing mortgage and who become unable to pay it when on means-tested benefits. When a need exists for a house more suited to a disabled person, however, a benefit claimant may be able to take out a new mortgage and receive assistance with the interest payable.

The source of this right to assistance is the Social Security (Income Support and Claims and Payments) Amendment Regulations 1995. Schedule 3 specifies the following:

S4 (7) ...housing costs shall be met in any case where a claimant satisfies any of the conditions specified in sub-paragraphs (8) to (11) below

S4 (9) ..The condition specified in this sub-paragraph is that the loan was taken out, or an existing loan increased, to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant.

It is important to note the following points:

S4 (7) states that housing costs 'shall' be met, rather than 'may' or 'can' be met. This means that a claimant who meets the terms of (9) has a legal right to such assistance.

The rule only applies where 'alternative accommodation' is being purchased. It cannot, therefore, be used by a disabled family member to buy their family home from another household member and continue to live in it. A property does not have to be more physically accessible to be 'more suited' to the needs of a disabled people. It may be more suitable for reasons of proximity to friends, family or support, or because it offers an opportunity for independent living or an opportunity to access education or employment. The new house must specifically be more suitable for the 'special needs of a disabled person'. Problems can occur with a benefit claim when the new house is more suited to the needs of the whole family, rather than just the disabled person, and this resulted in a more expensive house being purchased.

It is important to bear in mind that whilst a benefits-based mortgage based on the above rule can be a great option for many disabled people, the following issues should be noted:

The claimant will usually only receive assistance with the first £100,000 of any mortgage, unless adaptations have been made. If the house is deemed to be in excess of need, or unreasonably expensive, this may be limited further.

Where a large mortgage is taken out, a claimant may be unable to take paid employment at a later date if their employment income would not cover the mortgage costs previously covered by their benefits. It is only the interest on a mortgage that is covered. It is therefore important that the claimant can either take out an interest-only mortgage or has the means to pay the capital repayment element of the mortgage. The claimant may have to wait up to 39 weeks for the interest on their mortgage to be repaid if they were not previously in receipt of the qualifying benefits

For more information or advice contact:

Housing Options Scotland
The Melting Pot
5 Rose Street
Edinburgh EH2 2PR

Tel:  0131 247 1400

www.housingoptionsscotland.org.uk/about-us/  (opens new window) :  info@housingoptionsscotland.org.uk (opens new window)

Acquiring a Site

Local knowledge is a considerable asset in finding and purchasing suitable sites on which to build.  These will be advertised in local newspapers, the Solicitors' Property Centre, estate agents, solicitors and possibly in the Council itself.  Some will have outline planning consent for housing, some will be serviced with water, electricity and gas, others will have neither planning consent nor services. Do not purchase until, at the very least, outline planning consent for housing has been obtained.

Taking the Next Steps and Getting Good Professional Advice

Anyone wanting to build a house has to overcome a number of official hurdles before they are allowed to proceed to the bricks and mortar building stage.  Even before a potential house site has been identified, but if not as soon as possible afterwards, professional advice should be sought about the following essentials:

Planning Regulations and Procedures

Planning officials are more than happy to help anyone who is thinking of building a house with specific advice on the requirements of the planning system and more general advice on other aspects of the building process.   They have much useful experience and would far rather share it as early as possible to help the potential house-builder to avoid some of the pitfalls and delays that can arise from ignorance of what is needed to get planning consent.

The planning officials will explain the Council's policies on the siting and design and location of any new house to be built in its area.   They will advise on the requirements for drainage from the house site, road access and water supplies and they will provide assistance with, as well as advice on, preparing applications for outline and/or full planning permission and for a building warrant. Find further information on planning regulation and procedures in the planning section.

Legal Advice

Good legal advice from a qualified solicitor should also be sought at an early stage, particularly by those who have not yet acquired legal title to the house site. 

Designing and Building the House

The "Yellow Pages" Directory gives names of the manufacturers and suppliers of 'kit houses'.  Some building contractors and all kit suppliers also provide a choice of house designs which, if suitable, may avoid or reduce the requirement to employ an architect.  On the other hand an experienced architect will also greatly reduce the amount of time and effort that would otherwise be spent by the client on overcoming some or all of the hurdles involved in building a new house.

Local solicitors can provide names and addresses of architects and building contractors.