Investing in Assisted Living Properties is a smart choice, offering strong growth potential and reliable returns, typically ranging from 9% to 12% annually. With a growing demand driven by an aging population and the stability of long-term leases, these properties provide an opportunity for consistent income and long-term financial growth.
Supported Living and Assisted Living provides assistance to people with additional needs to be able to live on their own. As demand for this style of living continues to grow, so too has the market value – increasing by over 9% in the past five years.
With adequate supported living apartments experiencing a short-fall of nearly 500,000, occupancy levels in available apartments remains consistently high.
As many Supported Living properties are delivered through government-funded programs, they offer added long-term security and higher rental returns than that of a standard buy to let property.
Supported Living offers essential support to individuals with diverse needs, empowering them to live independently. As the demand for this supportive lifestyle grows, the market value has surged by over 10% in the last five years.
Despite this, there’s a significant shortfall of nearly 500,000 supported living apartments, leading to consistently high occupancy rates in available units.
Many Supported Living properties are developed through government-funded initiatives, providing investors with enhanced long-term security and superior rental returns compared to traditional buy-to-let properties.
At Assisted Living Investments, we specialize in this sector, assisting clients in building profitable portfolios for Supported and Assisted Living investments in the UK and worldwide.
Investing in Assisted Living properties presents a compelling opportunity compared to traditional buy-to-let investments. Firstly, the operating costs are significantly lower. With assisted living, you’re relieved of maintenance expenses typically associated with traditional rental properties. Additionally, you’ll experience minimal to no void periods, ensuring a steady flow of income. Essentially, it’s a hands-off investment where you can enjoy the benefits of property ownership without the hassle of day-to-day management.
UK Supported Living market is growing 30% year on year
Supported living services enable people with a range of needs to live happy and fulfilling lives, independently and safely in their local communities. When a person goes into supported living, they have their own home with their own tenancy agreement. At the time, they receive support and care which can range from a few hours a week to one-to-one care 24 hours a day. Many people with learning disabilities, severe autism and other needs, require some level of support, so that they can maximise their independence and live the life that they choose. A supported living service can help if someone who does not want to live in residential hospice care but would find it difficult to cope on their own at home. Supported living helps people to make choices about how they want to live and allows them to keep doing the things that are important to them.
Yes, many of our investors are from outside of the UK and are looking for a secure income generating asset in the UK. Non-UK residents are required to complete a simple Non-Resident Landlord form (NRL1) to register their ownership and income with HMRC. Our after-sales team is on hand to assist with this process.
Yes, many of our clients choose this option should it suit their portfolio requirements. We can assist with recommending a company to assist and guide you through the process of setting up a limited company. The process is efficient and can be completed within 3 working days.
There are restrictions on selling within the first 36 months. Thereafter, Yale Housing Association needs to be informed. This is performed by the seller’s legal representative.
A growing demand and shortage of property in the market will remain a fixture for the foreseeable future. The local authorities are bursting at the seams with vulnerable adults being housed in hospitals, hostels and hotels, which is costing the government an inordinate amount of money whilst simultaneously failing the vulnerable adults by providing them with inadequate care.
Occupancy levels in this industry remain at 100%. At the time of writing there is a queue of over 600 vulnerable adults awaiting accommodation with Yale, the community benefit society responsible for housing these vulnerable adults.
Yes, The Investment Room will be releasing several supported living developments, located mostly in the north of England.
No the tenancy agreement does not allow self-use. It is unlikely that an investor would want to self use after the lease agreement expires and walk away from such a high income whilst living in a development filled with vulnerable adults, unless they themselves had become vulnerable. Professionally speaking that would be the only exception.
There is no VAT applied to the purchase.
At any point after three years, owners may sell their property through a plethora of available channels. A strong secondary market for supported living accommodation exists in the UK and a large number of housing associations, charities and niche supported living (SL) resellers are actively pursuing SL accommodation.
Stamp Duty Land Tax (SDLT) applies to all buyers, irrespective of location, and is payable upon completion. Overseas investors will pay 5%.
The buyer will pay any income and CGT taxes due. There is no Council Tax payable.
Overseas investors should complete a non-resident landlord NRL1 form with HM Revenue & Customs, which will enable all returns to be paid in full. Without the NRL form, payments may be subject to a 20% withholding for tax purposes.
Yes, this can be arranged upon request.
Generally speaking, investing in SL is no different from investing in any other property. Tax implications are personal on a case by case basis and depends on the purchaser’s tax position. Please seek advice from a UK tax advisor for confirmation.
All properties are only marketed and sold once completed, furnished and with a signed tenancy in place.
Yale Housing Association is responsible for insuring the property.
Since Supported living property is classified as a quasi-residential property, the capitalization (or income) approach is used to determine the value. Typically supported living properties will at least double in value every 10 years.
There is insurance in place by the developer and also the tenant in the form of an FRI lease (Fully Repaired and Insured lease). Flood damage for example is covered. The building structure is covered etc.
Watsons Property Management Glendevon House, 4 Hawthorn Park, Leeds LS14 1PQ T: +44 (0)113 273 8788 W: watsonpm.co.uk
The property can be sold at any time after 36 months, which is when the buy-back agreement expires.
The yield is a percentage and is calculated by dividing the annual rent payable by the purchase price. The yield in this example is 10.00%. For example, with a property purchased for £175,000, the annual rent is £17,500. If this supported living property is purchased by an institution in an aggregated deal at a yield of 3.25% then the value of the property would be uplifted to £538,461.538 (£17,500 divided by £538,461.538 = 3.25%). This would result in a value increase to £363,461.54 which would then be shared in the manner explained above. The 30% increase is paid direct to the buyer, then any overage is split 50/50 between the owner and developer. In this example the owner would receive the initial increase of 30% at £52,500 and then 50% of the remaining overage: £155,480.76. Thus, bringing the owners’ total profit to £207,980.77.
The 25-year management agreement means that the property can be commercially valued against the yield, as a result they are worth at least the value of the sale price. If equated, a recent valuation of a property in a similar deal shows units valued at a 7% yield, bringing the property bought for £175,000 to a sale price of £185,714.
The freeholder of the building is the developer (TIR), who are currently and will continue to be responsible for maintaining the buildings externals, such as the roof.
The head lease holder is the developer, The Investment Room and The Letting Room (TIRTLR Ltd).
Yale Housing Association – a charitable not-for-profit Community Benefit Society company who provide safe supportive and sustainable housing to vulnerable adults. Their supported accommodation is for people who need care and supervision in order to manage their tenancies.
We are the UK’s leading specialist Social Housing and Assisted Living Investment provider for investors to gain great returns aligned with a great social impact. We offer a unique opportunity to invest in properties that provide safe, secure, and comfortable homes for individuals who require additional support with daily living activities due to physical, cognitive, or mental health conditions.
We’re the UK’s leading specialist Assisted Living Investment provider and we help investors gain great returns while having a positive social impact.
