Should I lease my property to a housing association or other similar organisations?
By Carl Agar
During the last 18 months I have noticed a marked increase in the number of housing associations and third sector organisations looking to lease properties from private Landlords.
So why is this happening and should Landlords be taking them up on this offer?
To address the first point my theory is simple.
Over the past 20 years the social housing sector has shrunk, leading to many tenants typically supported by that sector moving into the private rented sector.
We have now hit crisis point. Many of these tenants simply can’t really be supported by private Landlords as their support needs are simply beyond the scope of the service that a private Landlord can provide. The market is spiralling out of control - hence all the new regulations and licencing schemes - and housing associations are being encouraged to step back in with their supported housing service.
Unfortunately, such organisations do not have the funds to buy properties and therefore they are looking to lease the stock. This is only my opinion of course but the evidence is strong!
So should the private landlord lease their property to one of these organisations?
In short, if the rent is right, the answer is ‘yes’ - especially if you’re the owner of a high risk property that is typically let to low income families or benefit tenants. What you will find is that these organisations will more than likely be letting to the same tenants that you would, with one key difference; they underwrite your risk!
How does it work?
Normally your property will under go a quick assessment to identify if any work is required in order to meet their standards. They will look for such things as heat detectors in kitchens, a legionella assessment and often an asbestos report - but other than that it will be typical housing standard stuff that your property should comply with anyway.
Once approved you will be offered a lease, typically 3-5 years in duration, and this will set the fixed rent due every month.
Remember they are your tenant and not the actual occupier, therefore you get paid whether the property is let or not. Some even offer a maintenance inclusive deal which is a real bonus.
Another massive bonus is that they will normally agree to give you the property back at the end of any lease in the same condition that you gave it to them. So if you DO go down this road be sure to do a very thorough check in inventory!
So where to start?
There are lots of different types of organisations offering this approach and the main difference will be the tenant group they are supporting and the specific terms in their lease.
If something like this is of interest to you then contact your local authority, who I’m sure can advise you of any such organisations operating in your area.