INVESTING IS
SOCIAL HOUSING
Introduction to the U.K. Social Housing sector
Our social housing investment properties provide a valuable solution that benefits both investors and vulnerable individuals in need of secure housing. These properties are specifically designed to cater to the housing requirements of vulnerable adults, ensuring their well-being and providing them with a safe and comfortable living environment. By investing in social housing, you contribute to the social fabric of the community and make a positive impact on society.
Currently there are over 1.4 million people in urgent need of some form of social housing in the UK. 8.5 million people have an unmet housing need by the UK government. There are around half a million more families than the 1.1 million households currently recorded on official waiting lists. Two million children in England (1 in every 5) are living in overcrowded, unaffordable, or unsuitable homes. Last year over £1.4 billion was paid on temporary accommodation in the UK by the local authorities.
Social Housing sector numbers
The UK is facing a structural housing shortage and a significant cost of living crisis, resulting in an increasing demand for social and affordable housing. To meet the overall housing demand in England, estimated to be between 300,000 and 340,000 new homes per annum, approximately 150,000 of them are needed for affordable and social housing. Unfortunately, in 2020/21, only around 50,000 new affordable homes have been constructed, leaving a substantial capital deficit of approximately £16.9 billion.
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Recognizing the urgency of the situation, the Government has allocated substantial funding through initiatives like the Affordable Homes Programme and the recently announced Rough Sleeping Strategy. These programs aim to support the capital costs involved in developing and delivering social and affordable housing for rent or sale. However, in order to bridge the gap in housing delivery, a significant influx of private investment capital is required.
Key features and unique aspects
Completed property developments: Our properties are carefully selected from completed developments, eliminating the risks and uncertainties associated with ongoing construction projects.
Tenant damage and maintenance cover: Our properties come with tenant damage and maintenance cover, protecting investors from unexpected expenses related to property damage.
Long-term commercial tenants: We secure long-term leases with commercial tenants, such as housing associations, which ensure a stable and consistent rental income for our investors. The leases will vary between 5-25 years.
No ground rent or service charges: Our investment properties are free from ground rent or service charges, allowing investors to maximize their rental income without additional costs.
Secured rental yields: Our properties offer attractive yields of 8-10% NET sourced through the housing association. They also track CPI, so investors have a safe and stable hedge against inflation.
Recently refurbished properties: We ensure that our properties meet the highest standards of quality as Is required by the regulation with the housing association lease agreements.
FRI lease (full repairs and insurance): With our FRI lease, investors are relieved from the burden of property maintenance and repairs. All repairs and insurance matters are handled by the tenant (housing association), further streamlining the investment process.
Free property and lettings management: All aspects of managing the property, including tenant placement, rent collection, and property maintenance are taken care off ensuring a hassle-free experience for our investors.
Key features
Income-oriented investors: These properties are particularly appealing to investors who prioritize generating a consistent stream of passive income. The properties provide a secure and attractive return on investment, making it an ideal option for those seeking regular cash flow.
Risk-averse investors: The nature of these properties offers a reduced level of risk compared to other real estate investments. The presence of a longterm commercial tenant, such as a housing association, ensures a reliable rental income, minimizing the potential risks associated with tenant turnover or property vacancies.
Ethically conscious investors: If you value investments that contribute positively to society, social housing properties align with your ethical considerations. By investing in housing for vulnerable adults, you support the well-being and stability of marginalized communities, making a meaningful social impact.
Long-term investors: If you have a long-term investment strategy and are looking for stable and reliable rental income, social housing investment properties can be a suitable choice. With leases typically ranging from 5 to 25 years, investors benefit from a predictable income stream over an extended period.
Case Study
10 year cash flow illustration
INITIAL FIGURES
Purchase Price: £152,000.00
Rental Income: £13,689.00
Yield: 9.01%
YIELD GROWTH
Year 1 Yield: 9.01%
Year 10 Yield: 11.75%
Growth Percentage: 2.75%
RENT GROWTH
Year 1 Rent: £13,689.00
Year 10 Rent: £17,861.04
Growth Amount: £4,172.04
Growth Percentage: 30.48%
Total Rent Received: £156,929.04