Ready-made social housing HMOs
A larger property already converted, already licensed, already leased to a provider and already producing income. You are not buying a project. You are buying something that is finished and working.
These typically run at around 10–12%, and the income starts the month you complete. There is no refurbishment to manage, no licensing to apply for, no provider to find and no twelve to eighteen months of waiting to see whether the plan worked.
They are priced above bricks and mortar, and we will not pretend otherwise. You are buying a cash-flowing asset rather than a house — the conversion, the compliance, the lease and the tenants are all already in place, and that has a value. What you are really buying is the year and a half, and the builder risk, that you do not have to take on.
The practical consequence is on the lending. A lender values the building as though it were empty, so expect to model around 60% loan to value and to put more cash in than you would on a standard purchase. The offset is that the cash you leave in replaces borrowed money, so the monthly cash flow is stronger than the headline loan-to-value suggests.
This suits more experienced investors with more capital who care about income now rather than growth later. If that is not you, a social housing buy-to-let does a similar job for a much smaller cheque.
Where it works
- Income from the day you complete — no void while it is set up
- No refurbishment project, no licensing application, no provider search
- Strongest income of anything we source
- Saves the twelve to eighteen months a conversion would take
- The builder risk has already been taken by somebody else
The trade-offs
- Priced above bricks and mortar — you are paying for the work already done
- Lenders value it vacant, so expect around 60% LTV and more cash in
- A larger cheque than anything else we source
- The exit is usually to another investor rather than to a family
Is ready-made social housing hmos right for you?
Tell us your budget and how involved you want to be, and we'll tell you straight which of the three routes fits.