Letting residential property to government-backed housing providers like Ready Homes can offer landlords long-term rental income and reduced void periods. However, financing such arrangements through a buy-to-let mortgage isn’t always straightforward. Here’s what you need to know if you’re considering this route.
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Who Are Ready Homes?
Ready Homes is part of Clearsprings Group, a major provider of accommodation services to the UK government. They work with landlords to house asylum seekers and other vulnerable groups under long-term lease agreements, often backed by government contracts. These leases can span 5–10 years and offer guaranteed rent, property maintenance, and hands-off management.
The Mortgage Challenge
Most standard buy-to-let mortgages are designed for properties let under Assured Shorthold Tenancies (ASTs). These are typically 6–12 months in length and give landlords more flexibility. In contrast, leases with Ready Homes are commercial in nature and often exclude AST terms altogether. This can make traditional lenders wary, as the risk profile and legal structure differ significantly.
What Lenders Look For
When assessing a mortgage application for a property let to Ready Homes, lenders will consider:
Lease structure: Is it a full repairing and insuring (FRI) lease? Does it include break clauses?
Tenant profile: While Ready Homes is a reputable provider, some lenders may still view non-AST tenants as higher risk.
Property use: Will the property be used as a single dwelling or a House in Multiple Occupation (HMO)?
Experience: Landlords with a track record of managing similar properties may find it easier to secure finance.
Understanding social housing providers
Understanding social housing providers like Serco, Mears, and Clearsprings (operating as Ready Homes) is essential for landlords and investors engaging with government-backed housing schemes. These organisations are contracted by the UK Home Office to provide accommodation for asylum seekers and vulnerable individuals. Rather than operating under standard Assured Shorthold Tenancies (ASTs), they lease properties from private landlords under long-term commercial agreements—often 5 to 10 years—with guaranteed rent and full property management.
Serco and Mears typically manage large regional portfolios, while Clearsprings’ Ready Homes brand focuses on dispersed accommodation across England and Wales. While these arrangements offer landlords stable income and minimal day-to-day involvement, they also require navigating non-standard lease structures, which can affect mortgage eligibility and insurance. Understanding the operational models and reputational standing of these providers is key to making informed investment decisions in this niche sector.
Benefits of Leasing to Serco, Mears and Clearsprings Ready Homes
Long-term Leases
These housing providers offer long-term leases, typically 5+ years, which ensure a stable income with no void periods.
Guaranteed Rent
Rent is paid in full and on time every month, with no arrears. This provides a reliable income stream for landlords.
Maintenance and Repairs
These companies cover full repair and maintenance costs, excluding latent and structural defects. This reduces the financial burden on landlords.
Utility Bills
They pay for utilities and council tax bills, further reducing the landlord’s expenses.
Property Management
Full property management, including monthly inspections, is handled by Serco, Mears or Clearsprings ensuring that the property is well-maintained.
No Letting Fees
There are no letting or management fees which maximizes the landlord’s rental income.
Types of Properties That Can be Let to Ready Homes
Ready Homes are interested in a variety of property types, including:
- Traditional HMOs (Houses in Multiple Occupation)
- Family properties
- Former care homes
- Residential and student accommodations
- Bungalows
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Steps to Invest in Social Housing Stock
Research and Identify Suitable Properties
Look for properties in areas where Ready Homes operate. Ensure that the properties meet the companies’ requirements and are in good condition.
Evaluate the Property
Before making a purchase, evaluate the property’s letting potential. This includes inspecting the property’s condition and ensuring it meets the necessary standards.
Contact the Housing Management Provider
Reach out to Ready Homes to discuss your plans and target property. They can guide you speficially to ensure your property meets their preferences.
How to Finance Property Let for Asylum-Seeker Use
Standard buy-to-let mortgages are generally structured around Assured Shorthold Tenancies (ASTs), which offer short-term flexibility and are familiar to most lenders. These products are not typically designed to support long-term commercial leases, such as those used by housing providers like Ready Homes, Serco, or Mears. Because of this, landlords looking to lease their property under a long-term agreement with a social housing provider will need a specialist mortgage tailored to this type of arrangement—one that accounts for the unique lease terms, tenant profile, and risk considerations involved.
Finding lenders willing to support this type of property leasing requires a thorough understanding of the lender market and their attitudes towards risk. While mainstream banks might decline your application, independent providers are often more receptive and can provide the necessary finance. Use a specialist finance broker like BIZL to help you secure financing for specialist property investment opportunities like this.
If you need to make significant modifications to attract long-term commercial tenants, you’ll need financing for the conversion. You may be able to fund this with a bridging loan if the works are relatively modest. For works involving planning permission you’d typically need a more bespoke development loan. Once the works are complete and the property is let you’ll then be able to refinance onto a mortgage product.
The real benefit of purchasing a standard property on a short-term loan and converting it for use as social housing is that you can add tangible value to the property. This is both via refurbishments as well as tenanting the property with a lease to a social housing provider. When you then come to refinance the property onto a mortgage product you should expect a valuer to assign a higher value to the property. If so you should then be able to borrow more – typically up to 75% loan to value.
Final Thoughts
Letting to Ready Homes can be a smart move for landlords seeking steady income and minimal hassle. But it’s essential to understand the mortgage implications and work with the right partners. With the right preparation, you can secure a buy-to-let mortgage that supports your investment goals while contributing to a vital public service.
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