Social Housing Investing for Buy to Let Landlords: A Smarter, Hands-Off Alternative?
Discover how social housing investing offers 7-year contracts, full management, and 9–10% net yields — with none of the usual landlord headaches.
Seven Generations Property Brokers
6/5/202511 min read
Why More Landlords Are Turning to Social Housing Investments
Buy-to-let landlords across the UK are feeling the pressure.
A wave of changes over the last few years, including rising interest rates, increased regulation, higher taxes, and tougher tenant expectations, has made traditional lettings — especially via ASTs (Assured Shorthold Tenancies) — more complex and less profitable for smaller portfolio landlords than they once were.
So, is it even worth investing in UK buy to let property in 2025?
Well, we think so, but landlords need to change the way they approach choosing their next investment to ensure they secure a strong addition to their portfolio.
For many landlords, the answer could be social housing investing.
It offers something increasingly rare in the current market: predictable income, long-term security, and minimal day-to-day involvement by the owner.
In this article, we’ll break down how social housing investment works, why it’s gaining popularity among buy-to-let landlords, and whether it might be a better fit for your next property purchase.
What Is Social Housing Investing?
Social housing investing typically involves purchasing a property that is leased to a registered provider or third-party housing contractor, who uses the home to support vulnerable tenants. These can include:
The elderly or socially excluded individuals
Asylum seekers (e.g. via Serco or Mears Group)
People with disabilities or mental health needs
Women fleeing domestic violence
Ex-offenders (e.g. via NACRO)
Unlike council-owned affordable housing (which is often called social housing as well, but that's not what we're talking about in this article), these properties are usually privately owned, fully managed HMOs leased to specialist organisations under medium-term contracts.
Why It’s Gaining Traction with BTL Landlords
Most landlords aren’t switching to social housing as a diversification tactic — they’re switching because traditional buy-to-let is becoming more difficult to manage and ensure a consistent profit each month.
Here’s what’s frustrating landlords the most, and how this model addresses it:
1. What If Tenants Don’t Pay? (or Stay?)
Even well-screened private tenants can fall into arrears if they come across hard financial times or vacate the property unexpectedly, leaving you with void periods plus the additional cost of re-marketing the property to secure your next tenants.
Each void month wipes out 8% of annual yield, which quickly adds up if you struggle to find new tenants.
Where social housing differs:
Social housing providers sign 7-year contracted leases
You receive a contracted monthly rent, regardless of occupancy
This means that there are no void periods
Occupant management is fully handled at no additional cost
This makes it one of the few ways landlords can eliminate the risk of non-paying tenants in the property and not have to worry about short-term ASTs and tenant turnover.
It also means you don't need to hire a letting agent to manage the property for you, which further reduces your operating costs - maximising your rental profits.
2. Maintenance and Repairs Eat Away at Profit
A good month of rent can quickly disappear if the boiler breaks down or you have to fix a leaking pipe.
With higher interest rates squeezing monthly cash flow and inflation pushing both materials and contractor prices higher, the net impact is that your month's profit can be swallowed up with one repair bill.
Where social housing differs:
Most running repairs and maintenance are covered by the housing provider - some even cover the boiler too
Any damage by occupants is the social housing provider's responsibility to fix
You avoid the hassle and cost of regular callouts
Monthly inspections are carried out to proactively maintain the property
The property is contracted to be handed back in a comparable condition, less fair wear and tear
This is particularly attractive for landlords who want less responsibility day to day, whether that's because you're retired, living abroad or just busy with your day job.
Many of the social housing providers have their own in-house property management teams and contractors, meaning they can maintain the property for lower costs which benefits them in the long run when being contractually responsible.
3. Yields Look Great on Paper, But Reality Disappoints
Many landlords forecast 7–8% gross yields — but once you account for management fees, voids, maintenance, and compliance costs, you’re often looking at closer to 3–4% net when you reach the end of the year and reconcile your profit and loss.
Where social housing differs:
Social housing properties typically pay between 9–10% NET yields per year
Your outgoings are clearly defined at the start and minimal compared to ASTs
It’s easier to plan long-term cash flow and returns
Because the contracts cover most of the typical costs associated with buy to let property, it means that the rental income paid to you has minimal costs to be deducted (unless there are structural repairs needed - the social housing providers do not cover these, you would be responsible for these as with ASTs).
So while some properties may have the potential for higher gross yields, typically HMOs or short-term lets (aka holiday lets or AirBnBs), the costs reduce the profitability and the resulting net yield can often be lower than what the social housing providers are contracted to pay.
4. Section 21 Abolishment & Legislative Pressure
The proposed Renters' Rights Bill and other legislation over recent years are heading towards greater freedoms of choice and security for tenants while increasing the compliance requirements for landlords.
This can cause potential issues for property owners if they have a problem tenant and need to reclaim the property or can't manage to keep up with the new regulatory changes.
Where social housing differs:
The social housing provider is your tenant, not the occupants
The social housing provider is contracted to manage the occupants and handle any evictions if required
The social housing provider is contracted to maintain the compliance certifications.
These properties are used to house vulnerable service users in need of accommodation, which is what the social housing providers are contracted to do.
This means that managing the occupants and any potential evictions or issues reclaiming the property lie solely with the social housing provider and not you as the property owner.
In addition, they are contracted to renew and maintain the compliance documents needed for the property, such as the HMO license with the local authority, carry out annual gas safety certificates and renew the EICR and EPC checks when required.


Get in touch with one of the team to discuss what properties we have available for sale.
Interested in Social Housing HMOs?
Comparing Returns: Social Housing vs Traditional BTL
Yield Comparison Example
When landlords first hear about social housing investing, the question that comes up most is: how do the returns stack up compared to a standard buy-to-let?
The reality is that social housing HMOs can offer significantly higher net yields — without the usual headaches of tenant management, voids, or unexpected maintenance bills.
Factoring in Time & Management
On paper, a 6.5% gross yield might look like a good return from a traditional buy-to-let. But that figure doesn’t account for the costs:
Letting agent fees (typically 10–15% + VAT of the monthly rent)
Periods of vacancy (voids can eat up 1–2 months' rent per year on average)
Ongoing repairs and tenant damage
According to NRLA, landlord costs and lost income from these factors can erode 20–30% of gross yield — meaning your true net return could fall closer to 3–4%.
With social housing HMOs:
The leaseholder (e.g. Serco, Mears, Nacro) covers the vast majority of maintenance
No letting agent costs — the property is fully managed under contract
Rent is paid regardless of whether the property is occupied
The result is that your net yield is 2.5 to 3x more than a traditional buy to let property (9-10% vs 3-4%).
You Still Benefit from Capital Growth
Unlike long-leasehold assisted living models (where the property is often a leasehold flat with no land ownership), the social housing HMOs offered through Seven Generations are freehold houses.
That means:
You own the land and the building outright, sell anytime
The property appreciates along with the general market
There’s potential to repurpose the property post-lease
While typical buy to let yields hover around 6-7% gross, social housing HMOs regularly deliver 9-10% net (that's the equivalent of around 13-14% gross) with far less hassle for the owner.
How the Mortgage Side Works - And Why It's Rare
Can You Get A Mortgage on a Social Housing HMO?
✅ Yes — but there are limitations.
While many social housing property models (especially assisted living flats on long leases) are typically cash-only investments, Seven Generations specialises in freehold HMOs with contracted social housing tenants that are mortgage-eligible.
But My Broker Said There Isn't Any Lending?
We hear this a lot. Often the mortgage brokers whom people speak to don't work on many buy to let mortgages, less with HMOs and even fewer with HMOs that are leased to social housing providers.
This means they often haven't had to find suitable products, and not all leases are treated the same across lenders. Additionally, they may not have access to the right lenders through their panel, so when they search for a suitable product, none show up. The answer isn't that there isn't any lending available. It's that they can't always access it, depending on the lenders they have access to.
Here’s what you need to know:
Limited product range: Only a handful of lenders offer buy-to-let mortgages on these types of properties, so yes, your choice is restricted.
Lower LTVs: You’ll generally find maximum LTVs around 60–70% — lenders prefer a bigger deposit to offset perceived risk.
Higher rates: Expect rates that are higher than standard BTL mortgages — reflecting the specialist nature of these loans.
Fewer lenders: You’ll likely be working with niche or specialist lenders rather than mainstream banks.
The key advantage is that the properties we work with are mortgageable, where many social housing property types aren’t — especially compared to long-leasehold assisted living models, where finance is often impossible for retail property investors.


Get in touch with one of the team to discuss what properties we have available for sale.
Interested in Social Housing HMOs?
Common Concerns & Misconceptions - Addressed
Isn't this the same as Council Housing?
No — and this is a key distinction.
The properties Seven Generations works with are private investments, leased to specialist providers like Serco, Mears and Nacro. These organisations contract with government departments (such as the Home Office) or local authorities to house specific groups — for example:
legal asylum seekers
people with disabilities
vulnerable adults
ex-offender rehabilitation
They are not council-owned properties, and they are not leased to the local authority either.
Can the Social Housing Provider Cancel the Contract?
A fair concern, what use is a multi-year contract if it doesn't last?
The leases offered are contractual agreements, typically 7 years in length, with clear terms around notice, handback procedures, and protections for the landlord. There are break clauses in most of the contracts at set intervals and they differ for those triggered by the owner and the tenant.
Ultimately, the social housing providers are a business and the contracts have to give them the opportunity to protect their business with features such as break clauses. However, the likelihood of providers like Serco and Mears having to act on these is reduced, given they are large, stable organisations with national contracts — they’re not small operators likely to vanish overnight.
Even in the event of early lease termination, the social housing providers are often contracted to return the property to you in it's original condition less fair wear and tear, plus you retain ownership of the freehold HMO and could either re-let on the open market, re-contract with another provider or look to sell the property.
Is It Too Good to be True? - What's the Catch?
The yields are attractive, but as with all types of property investment there are trade-offs that landlords should be aware of before committing to a purchase:
Liquidity: While you can sell during the lease, your pool of buyers may be smaller because not everyone is familiar with this model.
Refinancing: Getting a remortgage or raising further finance during the lease can be more complex due to the limited lending available in the current market.
Specialist nature: These properties suit landlords looking for steady income over speculation — they’re less flexible than short-term AST lets.
As with most property investment strategies, this isn’t a “get rich quick” scheme — it’s a long-term, contract-backed investment that fits certain owners better than others. Take the time to learn about the contracts and what it means for you as the owner and whether they match what you want to achieve from owning a buy to let property.
Can Any Property Be Used for Social Housing Investing?
Social housing providers don’t lease just any property. Several criteria must be met for a property to be eligible, and it also needs to be in the right location at the right time. These providers seek to acquire properties in areas where there is specific demand to fill. When a particular area reaches capacity, they will consider taking on properties in a new area. This new location may not necessarily be in a nearby town or city but could be in a different region of the country altogether.
There are also restrictions in place by local authorities which limit the number of properties used for different types of social housing accommodation within an area, so that also has to be factored in when the providers are opening new locations.
Before approval, properties must:
Meet strict housing standards and compliance guidelines (e.g. HMO licensing, fire safety, room sizes)
Undergo site visits and inspections
Pass checks to ensure suitability for their service user group
This ensures the property is fit for purpose and is up to the standard that the social housing providers accept. They don't want to take on run-down properties in need of lots of repairs and maintenance over the coming years, as they are the ones responsible for paying for those under the contract.
Who Social Housing Investing Is (and Isn't) Right For
Social housing investing isn’t a one-size-fits-all solution. Like any property investment, it suits certain types of landlords more than others.
Ideal for Landlords Who Are...
✅ Tired of managing tenants, chasing rent, or dealing with constant repairs
✅ Looking for stable, predictable income without the usual landlord headaches
✅ Wanting a truly passive property investment backed by long-term contracts
If that sounds like you then this model could fit perfectly with your goals. These properties suit landlords who see value in:
Income security over fast flips
Minimal time commitment
Peace of mind through contracted management
Probably Not What You're Looking For If...
❌ Want total flexibility to sell or remortgage at any time
❌ Prefer to actively manage your tenants or upgrade the property for higher short-term returns
❌ Are uncomfortable with longer contractual commitments
Explore other property strategies and see if there is a better fit to meet your property investment goals.
Want to Learn More?
The best next step? Speak to a broker who understands this niche market.
They can:
See if this model aligns with your financial goals
Help you explore the available properties
Talk through the financing process


Get in touch with one of the team to discuss what properties we have available for sale.
Interested in Social Housing HMOs?
Frequently Asked Questions
What is social housing investing?
A type of property investment where the property is let to providers who are employed by the government or local authority to provide housing for those in need.
Can I get a buy-to-let mortgage for a social housing HMO?
Yes, you can get a buy-to-let mortgage on these types of properties, although the lending is more specialist than other buy to let properties.
How is social housing different from affordable or council housing?
This type of social housing is provided by large private companies with government contracts rather than the local authority.
Are social housing investments guaranteed?
No, they are contracted and government-funded, but due to break clauses being included in the leases they are not considered guaranteed.Do social housing investments work for first-time landlords?
They can offer a great option for first-time landlords due to the contract terms, which cover the management of the property as well as ongoing repairs and maintenance. This means they are very hands-off compared to other types of buy-to-let property, ideal for first-time landlords who don't have experience managing a rental property.
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