The developer partners with large Housing Associations and Charities who purchase properties in distressed locations to help supplement the demand for social housing and houses in need. Upon acquisition of each portfolio, they enter a 25-year index-linked lease with a government-backed housing association or charity, benefiting from the increase in rent every year the portfolio is held. They will handle all of the aspects of renting out the property, from marketing it to find suitable tenants, to ensuring that the property is compliant with all relevant legal requirements.
Advantages over Private Rent and Inflation
Government-Backed Rent
- Guarantees a rental income for a fixed period of time, even when the property is not occupied.
- No letting, management or renewal fees, and no having to deal with tenants, so it is hassle-free.
- No additional costs such as damage to the property. Additionally, the property comes back in the same condition as when you take it, giving you peace of mind.
- No need to worry about the numerous laws and compliance issues that an agent would generally deal with, saving you time and money.
- Rental income rises at least in line with inflation.
Private Rent & Inflation
- No rental received when property is unoccupied. Risk of empty property is now higher with unemployment rate increasing from 4.4% in 2020 to 6.4% in 2021.
- You are responsible for all fees, including legal fees and potential lengthy eviction costs and procedures.
- You are responsible for all costs including refurbishment and repairs.
- New compliance laws such as the Fire Safety Act 2021 could potentially dramatically impact on costs.
- Rise in rental income tends to be in line with inflation. However, the increase can be marginal – 0.85% in 2020, predicted 1.5% in 2021 and 1.8% in 2022, not meeting the Government’s target of 2% increase year on year.In addition, social housing rent will be regulated to Consumer Price Index (CPI) +1% for the next 4 years (to 2025). This means there is a risk of rental income freezing or decreasing over this period.
Investment Financial Summary
- Low Capital Entry
- High Returns
- Government backed Initiative
- Multiple Security Features
- Invest in Social Housing
Find Out More
Contact us for more information including our comprehensive information pack on this UK Government backed social housing investment opportunity.
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