Securing finance for supported living properties can present unique challenges, but with the right approach and lender, it's not only possible but can be a rewarding investment. While high street lenders may hesitate due to misconceptions about the tenants that need supported living, specialist lenders are increasingly recognising the value and stability of supported living investments.

Traditional lenders often shy away from supported living properties due to perceived risks associated with vulnerable tenants. This caution stems from a lack of understanding about the sector and its robust support systems. As a result, investors may find it difficult to secure mortgages through conventional channels, potentially facing higher interest rates or stricter terms.

Despite these hurdles, the supported living sector offers significant opportunities for investors willing to explore alternative financing options. Here's why:

1. Specialist Lenders: A growing number of specialist lenders understand the supported living market and recognise its potential. These lenders offer tailored products that account for the unique aspects of supported living properties. It is paramount to ensure that the appropriate lender is in place, and they are fully aware of the specific profile of the occupants of the property that will be held as security. Failure to do so could be detrimental to yourself, the lender, the Registered Provider or Care Provider and of course the tenants themselves.
2. Stable Income: Supported living properties often provide more stable, long-term income compared to traditional buy-to-let investments. Many specialist lenders acknowledge this stability, which can lead to favourable lending terms.
3. Social Impact: Some lenders are attracted to the positive social impact of supported living investments, aligning with their corporate social responsibility goals.
4. Government Backing: In many cases, rent for supported living tenants is backed by local authorities or housing benefits, providing an additional layer of security that appeals to informed lenders.

Success in financing supported living properties often comes down to partnering with the right lender, with the majority of them only accessible through a registered intermediary. Here are some tips:

1. Seek Specialist Advice: Mortgage brokers with experience in the supported living sector can connect you with appropriate lenders and will have relationships with underwriting teams that will ensure a prompt response and outcome.
2. Build a Strong Case: Prepare a comprehensive business plan highlighting the property's potential, the stability of income, and the social value of your investment.
3. Educate Potential Lenders: Be prepared to inform lenders about the supported living sector, addressing common misconceptions.
4. Consider Alternative Options: Look into social investment funds or ethical banks that may be more aligned with the goals of supported living.
5. Present the final lease at the earliest opportunity: To ensure that underwriters are given appropriate time to consider all of the terms within it, with an ability to suggest changes to the terms to suit their criteria, if necessary and of course, with the consent of the Registered Provider or Care Provider.

As awareness grows about the importance and stability of supported living investments, more lenders are likely to enter this market. This increased competition will lead to better rates and terms for investors in the future.

While financing supported living properties may require more effort than traditional investments, the rewards – both financial and social – make it a worthwhile endeavour. With persistence, the right approach, and specialist lenders, investors can overcome initial hurdles and contribute to this vital sector of the housing market.

At Supported Living Gateway we are partnered with a supported living specialist broker, Signature Funding Solutions. 

We will be exhibiting together at the National Landlord Investment Show in London on 30^th October.  We’re also delivering a presentation on the growing demand for supported living and how to capitalise on this trend. Come along and meet us!