There is no problem for a British Citizen receiving any benefits to which they are entitled. Period.
Also the fact that he is receiving benefits/public funds does not necessarily mean he would be unable to support the applicant.
The issue becomes one of being able to clearly demonstrate that any sponsor who is dependent on the state will be able to to support another consumer for any length of time.
The UKBA will look to see if the sponsor might need to claim additional public funds to support the applicant if leave to enter granted.
The funds from the sale of the house may likely become important as 'Sufficient Maintenance' can be supported by:-
The sponsor
or
The applicant's own funds or funds available to them
or
Any combination of applicant funds and sponsor funds
or
Some form of 3rd party support
Just to confirm that the financial standing 'test' needs to show disposable income of about £106 per week for a couple and an additional £62.33 for each dependent Child (up to 20 yrs)