Investing in social housing is becoming an increasingly attractive option for landlords looking for long-term, hassle-free income. With 5+ year leases, guaranteed rent, and no tenant management, it’s no surprise that more investors are exploring this sector. However, securing the right mortgage for a social housing buy-to-let (BTL) property isn’t always straightforward.
What Is a Social Housing Mortgage?
A social housing mortgage is a specialist BTL mortgage designed for properties that will be leased to a housing association, charity, or local authority. Unlike standard BTLs, these properties come with the security of a long-term lease but also with specific lending criteria that investors need to meet.
Many traditional BTL lenders won’t finance properties let to social housing providers due to the unique lease structures. However, a growing number of lenders are now recognising the benefits and offering specialist products.
Which Lenders Offer Social Housing Mortgages?
While availability isn’t set in stone, the following lenders may consider financing social housing properties:
• Metro Bank
• Aldermore
• Fleet Mortgages
• Landbay
• Paragon
• West One
• Vida Homeloans
• Quantum Mortgages
• Zephyr Homeloans
• Shawbrook Bank
• MFS (Market Financial Solutions)
• Together Money
• Hampshire Trust Bank
Each lender has its own eligibility criteria, and terms can vary based on factors like property type, lease terms, and rental coverage ratios.
Affordability & Lending Criteria
Lenders assess affordability differently for social housing mortgages. Some key factors include:
• Rental income coverage: Some lenders require a higher rental stress test, while others accept
guaranteed income from social housing providers.
• Property type: Some lenders won’t finance flats in high-rise blocks or ex-local authority properties.
• Lease length: Most lenders prefer 3-5+ year leases with a reputable provider.
• Experience: Some lenders require borrowers to have landlord experience, while others accept first-time landlords.
New Mortgage Products for Social Housing BTL
The good news is that more lenders, such as Hampshire Trust Bank, are launching specialist social housing BTL mortgages. Products are now available that cater specifically to long-term leases with social housing providers, making it easier for investors to access finance.
Why Invest in Social Housing?
✔️ Guaranteed rent – even if the property is empty
✔️ Long-term leases – 3-5+ years, reducing tenant turnover
✔️ No tenant management – housing providers handle everything
✔️ Minimal maintenance – some leases include repairs and upkeep
Final Thoughts
Getting a mortgage for social housing can be trickier than a standard BTL, but with more lenders entering the market, options are improving. If you’re considering this strategy, working with the right lender and a knowledgeable broker is key.
Thinking about investing in social housing BTL? When you work with Manchester Sourcing, you get full access to our power team, including a top mortgage broker who can find you the best social housing mortgage deals and guide you through the process.
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