What is Social Housing Investment?

The rundown

Social housing investing involves purchasing and letting properties to government-backed housing providers to offer accommodation for vulnerable tenants and those in need whilst providing investors with a dependable income stream. This form of investment, while serving a significant societal role, also typically offers investors a myriad of benefits including all bills and utilities paid for, no rental void periods, and all property maintenance covered.

‍

The growing Importance of Social Housing

Social housing, traditionally viewed as a government responsibility, has increasingly become an area of interest for private investors due to government-led incentives, funding and housing provider tenancy benefits. Social housing investment not only addresses the pressing issue of the UK housing crisis but also opens up avenues for sustainable and ethical investment.

Axxco’s Approach to Social Housing

At Axxco, we're dedicated to sourcing and refurbishing properties that serve as vital housing for vulnerable tenants. Our process ensures each property we select meets stringent criteria, making them ideal for social housing. We then work closely with top government-backed UK housing providers to tailer each property, carry out all necessary refurbishments, and bring up to official regulatory standard. Investors are integral to this process, purchasing properties directly and benefiting from a direct lease agreement with major, government-funded housing providers. The end result is a high-yielding, fully-managed, asset-backed investment for our investors.

Social Impact and Financial Returns

The allure of social housing investment lies in its dual benefit – it’s an avenue for making a positive social impact while also providing a reliable source of income. In an era where ethical investment has become a priority for many, Axxco’s model offers a compelling option. Investors get the opportunity to play a direct role in alleviating the UK housing crisis and housing vulnerable tenants while benefiting from the financial stability that comes with a long-term government-backed lease.

‍

‍

What exactly is Social Housing Investment?

Understanding Social Housing Investment

Social housing investment, a term increasingly gaining attention in the property investment sector, refers to the process of investing in properties specifically designated for social housing purposes. These properties are typically rented out to  housing associations, providers or local councils. This investment model addresses a critical need in society – providing affordable, secure housing to those who might otherwise struggle to access standard market-priced rentals.

First time investor? Read our buy-to-let guide

The Economic and Social Impact of Social Housing Investment

Investing in social housing isn't just a financial decision; it's a socially responsible one. This form of investment offers long-term, inflation-linked cash flow, making it an attractive option for investors looking for stable returns. Unlike some volatile markets, social housing provides a more predictable income stream and typically alleviates many typical landlord headaches associated with standard buy-to-let investment.

By participating in social housing investment, investors contribute to a solution for the housing crisis, increasing the supply of quality homes for vulnerable tenants. This action doesn't just benefit the tenants; it has a ripple effect, contributing to the overall health and stability of communities.

‍

‍

The Secure Nature of Social Housing Market

One of the standout features of social housing investment is its security. These investments are often tied to government-backed leases, varying in duration from 5 to 20 years. This government linkage offers a layer of security not always present in other forms of property investment. The guaranteed rental income from these long-term leases allows investors to plan and forecast their financial future with greater accuracy and confidence.

Core Benefits of Investing in Social Housing

There are multiple benefits to investing in social housing:

1. Ethical Investment: Social housing investment is considered an ethical form of investment because it directly contributes to addressing the housing shortage, providing homes for those in need.
2. Portfolio Diversification: This type of investment can offer excellent diversification for your portfolio. By including social housing as part of your investment strategy, you reduce overall risk exposure, balancing out the high-risk, high-reward nature of traditional investment options.
3. Exceptional, secure returns: With government-backed leases and long-term contracts, social housing investments provide a predictable income stream, offering financial stability and peace of mind for investors

What does the Social Housing Lease offer investors?

Leasing your property to a major housing provider can unlock a multitude of investor advantages, including:

• A 7-year lease with an FTSE 250 company, with an option to renew
• Day-to-day maintenance and repairs undertaken at no cost to the landlord
• Guaranteed Rent (paid monthly by BACS when you hand over the keys)
• Monthly property inspections
• Council Tax and utilities paid
• No void properties
• No Management Fees.  No registration fees. No set-up fees
• No rent arrears or debt collection
• No Call outs payments to contractors
• Full HMO Management
• Administration of licenses and certification administered by our their team of experts
• All properties are managed by in-house Housing and Maintenance Officers, supported by a team of administrators.

Please bear in mind, the advantages may differ depending on your chosen provider.

In conclusion, social housing investment represents not just a financial opportunity but a chance to make a positive impact on society. By providing a stable, secure, and ethical investment option, it allows investors to contribute meaningfully to a societal need while also securing their financial future. The combination of economic benefits and social responsibility makes social housing investment an attractive and significant choice for today’s investor.

Axxco's Social Housing Investment Model

Property Sourcing: Identifying Ideal Properties

Axxco focuses on identifying properties on the open market that are ideally suited for housing vulnerable tenants. These properties are selected based on a stringent set of criteria, ensuring they meet the specific needs and standards required for social housing. This careful selection process is vital to Axxco's model, as it ensures the properties are not only suitable for tenants but also viable for investors seeking stable returns.

Property Assessment and Preparation: Ensuring Suitability and Standards

Once a potential property is identified, Axxco collaborates closely with housing providers to assess its suitability. This phase involves a thorough evaluation of the property's condition and the necessary refurbishments to meet the required standards for social housing. A letter of intent is issued during this phase, and the property is preliminarily registered with the housing provider. This step is crucial as it guarantees that the property, once refurbished, will be up to the standards expected by both the investors and the housing providers.

Investor Engagement and Property Purchase: A Transparent Process

In the next phase, Axxco actively engages with potential investors, presenting them with a detailed overview of the investment opportunity. This includes comprehensive information about the property, including refurbishment costs, sourcing fees, potential rental income, expected yield, and the projected timeline for the investment. Investors are thus fully informed about every aspect of the property they are considering. The property is then purchased directly from the seller, with the lease agreement being an integral part of Axxco’s investment package, ensuring clarity and transparency in the investment process.

‍

‍

Post-Purchase Process: From Refurbishment to Rental Income

After the acquisition of the property by the investor, Axxco oversees the commencement and completion of the necessary refurbishment work directly with our expert in-house build teams. This phase is critical as it transforms the property into a suitable home for vulnerable tenants, aligning exactly with the required standards from the housing provider. Upon completion of these improvements, the investor begins to receive monthly rental payments directly from the housing provider. This marks the beginning of the return on investment for the investor, reflecting the tangible impact of their investment in social housing.

We find many investors struggle to accomplish a full property renovation for social housing, with a 200+ point refurbishment checklist and a build team that knows exactly what they are doing having worked directly with major housing providers for 10+ years we offer a faster (4 week), hassle-free and often cheaper turn-around on all of our properties as part of our investment model.

Key Takeaways for Investors with Axxco's Model

1. Ownership and Control: Investors retain full ownership of the property, with the title deed in their name. This offers them complete autonomy and control over their investment.
2. Direct Contract with Housing Provider: The leasing agreement is established directly between the investor (landlord) and the housing provider, ensuring a straightforward and transparent rental process without the involvement of intermediaries or management companies.
3. Exclusive Partnerships and Focus Area: Axxco has established exclusive collaborations with major contractors, focusing on the North West of England. These partnerships, backed by the British Government, ensure a reliable and secure investment environment.
4. Value Proposition: Axxco’s model specialises in connecting investors with a high-yield investment opportunity in social housing, marked by a minimum of a 5-year agreement with leading housing providers. This approach aims to offer what is believed to be one of the safest forms of investment in the social housing sector.

‍

‍

Why investors continue to choose Axxco

Robust, High-Yield Investment Opportunities

Our focus is on providing investments that are not only high-yield but also secure. This is achieved through a minimum of a 5-year agreement with leading FTSE 250 listed housing providers. These providers are are backed directly by the British Government, adding an extra layer of security and assurance for investors.

Safe and Secure Investment Model

One of the key aspects of our value proposition is the safety and security of our investment model. Unlike some other investment options in the market, our model does not rely on third parties or management companies. This direct approach reduces the risk associated with intermediaries. Additionally, the investments are asset-backed, providing a tangible security to the investors. This safety and security are crucial in making our social housing investment model a reliable choice.

Comparative Advantage Over Competitors

Many other investment products in the market do not provide the asset-backed security that we offer. This unique feature, combined with the direct relationship with government-backed housing providers and the absence of reliance on third-party management, sets our model apart in the investment landscape.

Here to help you

We invite all interested parties to reach out for further information or clarification regarding social housing investing. Social housing can come with various questions and considerations, our team of experts are readily available to assist, educate and guide you through the entire investment process entirely free of any charge.

‍

Book a discovery call with us directly