Social housing is a term used to describe a variety of accommodation provision for those that need it. This includes low income housing, housing for those with learning, physical or other disabilities, housing for the homeless, those escaping domestic abuse, asylum seekers or any other group requiring safe and secure accommodation. Big Society Capital’s latest market data showed that investment in social housing is by far the largest segment of a £6.4billion social impact investment market. Private investment in the social housing sector has been steadily growing for several years now and is one of the areas they highlight for future growth.
This investment trend is on the rise, partly because there is a great need to plug the gap between demand and supply of social housing, but it also offers unique qualities for property investors – rent is usually backed by central or local government schemes with voids in rent usually covered by the housing association. As tenancy contracts are not with the property occupants but with a housing association they also hold more qualities of a commercial real estate contract, often with repair and maintenance clauses and longer lease terms. In addition, investment in social housing property offers investors the opportunity to make a real difference with their money whilst still earning attractive net yields and a stable monthly income.
Recent figures suggest that there is aa acute shortfall of approximately 90,000 social housing and assisted living accommodation, with over 8.5 million people qualifying for social housing support. The growing demand has given rise to a unique opportunity for investors seeking high stable returns and a hands off property investment
The latest market data showed that investment in social housing is by far the largest segment of a £6.4 billion social impact investment market
Private investment in the social housing sector has been steadily growing for several years now and is one of the areas highlighted for future growth. Social housing investment provides long term, government backed rental income, offering financial security whilst addressing a critical social housing need
This investment trend is on the rise, partly because there is a great need to plug the gap between demand and supply of social housing
It also offers unique qualities for property investors – rent is usually backed by central or local government schemes with voids in rent usually covered by the housing association
As tenancy contracts are not with the property occupants but with an organisation such as housing associations they also hold more qualities of a commercial real estate contract, often with repair and maintenance clauses and longer lease terms
Investment in social housing property offers investors the opportunity to make a real difference with their money whilst still earning decent net yields and stable income
Social Housing is a growing market and is becoming increasingly popular in a range of settings as an alternative to residential care, with a focus on providing assisted independent living and better care outcomes.
Supported living accommodation is funded in full that is both accommodation and additional care needs, through the welfare system. As such, it can attract higher rent allowances than other forms of public housing.
Social housing work is due for steady growth over the next two years, as Glenigan reports in January 2024,that despite a 13% slump in 2023, the overall value of social housing project starts at an underlying level will rebound by 7% in 2024
In keeping with the other arm of DCA Business Services and our access to an extensive panel of lenders, we are able to secure mortgage finance/funding for our investors where needed and subject to status. The guidelines and criteria for this type of finance is aligned to that of buy-to-let mortgage finance
Social housing and assisted living investment is an excellent investment opportunity, not only offering immediate returns with tenants already in situ, but also providing a highly attractive yield from a hands-off guaranteed monthly rental income
The healthy yield of 10% net return comes with a 25year lease with a housing association which is Government backed
Fully managed by the appointed housing association at no cost to the investor and with tenants in place
The lease is an FRI lease which includes full repair and insurance costs covered so there are no ongoing running or repair costs
Inflation linked annual rent increases are embodied in the lease agreement at CPI plus 1%and most importantly, there are no void periods
Properties can be sold at any time
All properties are new or recently refurbished
The healthy yield of 10% offers investors a unique situation whereby they are able to take up the mortgage finance we are able to secure through our panel of lenders and still earn a net yield return of approximately of 2- 3%
