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14/7/25 8:13 pm
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As the Renters’ Rights Bill edges closer, it is understandable that some landlords are starting to weigh up their options, whether that’s finding an alternative route or, for some, deciding to exit the market altogether.
One option that has gained traction this year is leasing properties to companies such as Serco, Mears Group and Ready Homes, which manage accommodation for asylum seekers on behalf of the Home Office.
These arrangements are marketed on the basis of guaranteed rent, no voids, and minimal day-to-day management responsibilities. On the surface, an appealing prospect for any landlord feeling the squeeze of regulation, tax changes, and rising costs.
This topic has attracted growing media attention, and I recently spoke to iNews discussing why these offers are proving so tempting for some landlords and the potential risks involved.
As with most things in property, what looks attractive at first glance must always be looked at in far greater detail.
Under these government-backed contracts, landlords can lease their property for a long period, often several years, and in return receive guaranteed rent with no voids, no rent arrears, and no need for self-management.
In the current climate, that is not something to dismiss lightly. Landlord confidence is at an all-time low. We have had years of increasing regulation, potential new tax burdens (including talk of landlords paying National Insurance on rental income), and, of course, the upcoming Renters’ Rights Bill, which will abolish Section 21.
So, for many landlords, a guaranteed income stream with minimal hassle looks like a lifeline.
However, as with most things that look too good to be true, there are caveats.
Some landlords have found their properties left in poor condition at the end of these long-term leases. You are often handing full control of your asset to another company, so you need to scrutinise the contract terms, especially repairing clauses, liabilities, and what happens if there is anti-social behaviour at the property.
Equally important are the notice periods and break clauses. These are commercial lease arrangements, not standard assured shorthold tenancies, which means they can lock you in for several years with less flexibility than you would have under a private tenancy.
Another key point is that these arrangements fall outside of the Renters’ Rights Bill, because they are not standard assured shorthold tenancies. That is partly why some landlords are now turning to them, they offer a way to sidestep upcoming restrictions, including the ban on Section 21.
However, that also means you are effectively sub-letting to a third party, so you must ensure your mortgage lender is aware and If you don’t, you could find yourself in breach of your loan conditions or without cover if something goes wrong.
My advice? Always seek independent legal advice before signing anything. Do not just rely on what you see on social media or on forums, there has been a surge of posts suggesting landlords are making “easy money” through these schemes. Property investment is not, and has never been, a “get rich quick” business. It is a professional enterprise that requires proper due diligence.
There is also an ethical dimension that some landlords cannot overlook. Leasing to asylum accommodation providers inevitably means those homes are not available to local tenants, students, or professionals. It is a politically sensitive issue, and landlords need to make their own moral and business judgement on whether it is right for them.
At the same time, there are reputable companies offering alternative commercial lease models that support the local rental market while still providing guaranteed rent and long-term stability. For example, Northwood offers similar schemes in the private sector, and Elliott Leigh works with councils to provide three to five-year leases for temporary accommodation. These kinds of arrangements can give landlords peace of mind while helping to meet local housing needs, but as always, the terms should be reviewed carefully and independent advice sought before signing anything.
The Government’s housing strategy and the Renters’ Rights Bill are reshaping our sector. It’s no surprise that some landlords are looking for stability in an uncertain environment, but stability should never come at the expense of proper understanding.
If you are considering one of these Home Office-backed contracts, do your homework. Read every clause. Get advice, and remember, property is a business, not a hobby.
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