The UK social housing market is expanding. With demand continuing to outperform supply, and the government’s push to expand housing accessibility, the sector has become an attractive option for property investors. As of March 2024, the UK’s social housing sector compromised of around 4.5 million homes, a figure which continues to grow (source: GOV.UK). This growth could present many opportunities for brokers and landlords alike.

A Sector on the Rise

Recent figures from the Office for National Statistics show that average social rents rose by 7% in 2024, with average rents reaching circa £1,339 per month. Despite this, demand for social housing is growing, driven by rising living costs, changes in private rental affordability and a growing population of tenants.

For landlords, the attraction for social housing is clear. Government backed leases, longer-term tenancy agreements and relationships with housing associations can offer stable and regular income. In a tightening private rental market, the social housing sector could present a scalable opportunity.

Opportunities for Brokers

As landlords look to enter, or expand into the social housing market, brokers are playing an increasingly critical role. Due to the complex nature of social housing transactions, landlords entering this space will require specialist finance solutions that align with their investment strategies and the requirements of social housing tenancies. Brokers should understand social housing lease agreements, local authority involvement and strict regulatory standards. Those who do are best positioned to support their clients and help source funding tailored to their needs.

Partnering with a Specialist

At Crystal Specialist Finance, we can source specialist buy-to-let mortgages for your landlord clients looking to expand into the social housing sector. Whether your client is purchasing a property to lease to a housing association, refinancing a care home, or upgrading their portfolio to meet social housing regulations/standards, our expert team are here to help.

What’s more, you will have access to our extensive lender panel who offer flexible products and rates which you’ll struggle to access elsewhere.

Here’s a breakdown of some of the social housing criteria you can access through us.

Lender 1

Known for their flexible underwriting and asset acceptance, this lender is ideal for your clients with non-standard scenarios.

• Holiday lets, HMOs, MUFBs, new builds and flats above commercial premises considered

• Can cater to foreign nationals, expats and clients with adverse credit

• Interest can be rolled for up to 9 months

• Option for 2% deferred interest

• Loan sizes from £150,000 - £3,000,000

• No ERC overhang after the initial period – Offering flexibility in the long term

Lender 2

If your clients have specialist tenant types and lease structures, this lender could be the most suitable option.

• Live-in carers and carers on a rotation basis

• No maximum tenancy term on certain product ranges

• Accept tenants with vulnerable circumstances

• Flexible tenancy structures support a range of social housing models

Lender 3

Known for their detailed due diligence, this lender provides robust lending options for properties leased to housing associations or professional operators.

• Lease that includes market rent, standard rent review terms, and no structural alterations

• Assumes standard AST with private rented sector tenants for affordability assessments

• Property to be valued as a standard house or an HMO with no premium attributed to the lease

• Acceptable use classes: C3, C3(a), C3(b), C3(c), C4

• Offers commercial valuations

• Private tenants in receipt of Housing Benefit or Universal Credit are acceptable

Lender 4

This lender offers bespoke funding solutions across a wide property and borrower spectrum.

• Lends against care homes for children and adults

• Lends against properties let to tenants with vulnerable circumstance subject to a review of the lease agreement

• No criteria limiting the maximum number of bedrooms in a HMO or maximum number of units in a MUFB (MUFBs over 10 units will be placed on a commercial term plan)

• Specialist support team with £74.2M lent for social housing in 2024 alone

• Accepts limited companies, individuals, trusts, SIPPS and SAAS borrowers

• Accepts properties with restricted use

• Buy-to-let, commercial and bridging funding available based on property type and customer borrowing needs

The UK’s social housing sector is no longer a niche but can be a strategy for landlords and property investors looking to achieve long term profitability. With government support, tenant demand and lender innovation all on the rise, now is the time for you to deliver solutions for your clients looking to expand into this space.

We are your go-to partner when it comes to placing more cases with confidence. Call our New Business Advisers on 01827 337710 to see how we can support you with social housing funding for your clients.

Click here to view our buy-to-let offering.