Whilst lending isn't freely available on social housing investments, and in particular long term guaranteed rent investments, there are now a decent number of lenders that will consider it.
From our experience, the current options are:
Of course, the lenders listed above will look at your personal situation and assess things from there. Bear in mind that the interest rates are often higher than lending against vanilla buy-to-let, but the fact that we can get borrowing against it is a positive.
The rates vary between 4% upto 7%. Interest only options are available as well.
A couple of the lenders above will also lend to non-UK nationals assuming your personal finances are in order.
Please note, we are not qualified mortgage advisors, so this page is just letting our clients know that lending is an option against these types of investments.
"Lending is available upto 75% LTV for a maximum of 30 years on a capital and interest basis" - Lloyds UK
Why Can't I Use a Regular Buy-to-Let Lender?
Because you're not tenanting the property with a tenant on an Assured Shorthold Tenancy (AST). If you are speaking to other companies that do something similar to us and they advise you that you can use regular buy-to-let lending against these types of investments, then they are either lying to you or they're uneducated about the process.
Sure, you can go ahead and use regular lending against this type of investment, but there is a good chance that you'll get into trouble with the lender. If you read the contract with them, they would have stipulated in their terms and conditions that anything other than an AST isn't allowed. The risk is yours to take, but we would never advise our clients to take this risk.
Buy using Cash and then Refinance
The above is our recommendation on how you should do it. Due to the nature of buying these types of investments, you have to act fairly quickly to get a deal wrapped up.
We have investors that took the plunge and bought cash and then refinanced 6 months later. As long as you have good credit and you have experience as a landlord, then there is a good chance that you will be able to refinance using one of the lenders highlighted earlier.
Again, this is just our suggestion. We cannot give out financial planning advice and we are not attempting to do so.
What Next? Speak to a Broker?
If you're interested in speaking to a broker about your options, please get in touch and we can put you in contact with a reliable commercial broker that has delivered on this product.
If you have your own buy to let broker that you've been using, then they might not have the expertise on this typer of lending. It's best to speak to a commercial broker that is more clued up on this type of longer lease investment.