Buy-to-let mortgages for landlords with vulnerable tenants  


Landlords considering letting their property to a vulnerable person will find there’s lots of support and many benefits for all involved. Vincent Burch has the lowdown


Many landlords haven’t considered renting their property to vulnerable tenants given the perceived risks in what can be a complex sector of the buy to let market.

However, with the right information and advice, it could present landlords with a viable, long-term business opportunity offering mutual benefits for both landlord and tenant.

Today, there’s an increasing recognition of the needs of vulnerable people in society. Incentives from Government, specialist services to manage tenants and tailored mortgages are making it easier for the socially-conscious landlord to take advantage of what is likely to be a long-term demand for rental properties in this sector.

So why should a landlord consider this sector?

There are a number of reasons it can be attractive. One is that there are organisations that will take full control of the management of the tenants in a property making it a fairly hassle-free arrangement.

These arrangements tend to be longer term than standard tenancies which means a more stable level of tenant occupancy, and rental income, with fewer rental voids and lower tenancy turnover. This reduces the amount of work you need to do finding replacement tenants.

With a better understanding of this opportunity, landlords will be able to manage the risks effectively, optimise their investment and make a big difference to someone’s life.

How can a private landlord help provide a home for a vulnerable person?

People can be classed as vulnerable for many different reasons. They could have mental health issues or learning disabilities, be homeless, ex-offenders, victims of domestic violence, asylum seekers or, as the current war in Ukraine has illustrated, refugees.

Private landlords have a vital role to play in housing those in need and there are a number of organisations that support this partnership:

SERCO

the Home Office’s appointed asylum and refugee accommodation provider of recent years. It manages an extensive property portfolio, reducing the cost to Government by integrating hundreds of landlords into one property portfolio.

Housing associations and charities

Often, they will rent properties through the private rental sector to vulnerable tenants, for a period of three years. This can be a convenient way for landlords to secure an income with the day-to-day concerns of the property managed on their behalf by the housing association.

The attraction of dealing with these organisations is that they will effectively take over the management of the tenants in your property for the duration of the tenancy, relieving a lot of the maintenance, time-management and rent collection from you.

It’s best to get in touch with these organisations directly to express your interest in providing homes for refugees or vulnerable tenants, so that you can get to grips with the application process and any specific requirements they may have.

At Vincent Burch Mortgage Services we have some contact information we can share with you.

What preparations will landlords need to make?

There are likely to be a number of specific requirements that you’ll need to get in order when preparing to rent a property to a vulnerable tenant through one of the organisations mentioned previously.

They may be stricter on things like energy performance certificates (EPCs), hygiene standards, fire certificates, electrical appliance testing, décor and general facilities. Knowing this up front will enable you to budget effectively for any preparation or remedial work and make your application go through smoothly.

Do I need a specialist mortgage for housing vulnerable tenants?

Buy-to-let mortgages for this niche market are not generally available from high street lenders.

But, there are a number of specialist lenders who operate successfully in this sector and our experienced team at Vincent Burch Mortgage Services can talk you through the mortgage options available for your business.

It’s worth noting that those on housing benefit and housing association tenants are not typically classed as vulnerable people by buy-to-let mortgage providers.

To maximise the potential for a successful outcome when applying for a vulnerable tenant buy-to-let mortgage, always speak to an independent broker.

They can help you navigate the detail and find the best vulnerable tenant buy to let mortgage on the market.

With an in-depth knowledge of lender policies and criteria, they’ll work closely with you to ensure the process is simple and stress-free.

Vincent Burch is mortgage director at Vincent Burch Mortgage Services

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