Foundation Home Loans has widened its buy-to-let criteria to accept single household properties let to Housing Association and Local Authority tenants, in a move designed to offer landlords greater flexibility while supporting the rising demand for affordable housing.
The intermediary-only specialist lender confirmed that the change, announced today, applies to individual and limited company landlords on eligible single household buy-to-let and Solutions products.
Lease agreements of up to five years will be permitted, providing what the lender described as more predictable income streams and longer-term stability for investors.
BENEFITS FOR LANDLORDS
Foundation said that landlords stand to benefit from reduced risks of void periods, as Housing Associations and Local Authorities typically guarantee rent and take responsibility for tenant vetting and inspections.
In practice, this can deliver steadier cashflow and a measure of protection in what has become a challenging rental market.
Criteria for acceptance vary across the UK. In England and Wales, providers must be listed on the Government’s register of social housing and not be a charitable organisation. In Scotland, providers must appear on the Scottish Housing Regulator register, listed as compliant, with landlord types restricted to local authorities or registered non-charitable societies.
The maximum loan available is £3m, and rental assessments will be based on the lower of contractual or open market rent. Break clauses and make-good provisions must also be included in tenancy agreements.
Excluded tenancy types include HMOs, supported accommodation, assisted living or sheltered housing, hostels, nursing homes and care homes.
SUPPORTING BROKERS AND CLIENTS
Tom Jacob, director of product and marketing at Foundation Home Loans, said the development was a logical next step for the lender.
“At Foundation, we are always looking for ways to broaden the opportunities available to brokers and their landlord clients. Accepting lettings to Housing Associations and Local Authority tenants is a natural step that supports landlords in achieving secure, predictable returns, while also helping to meet the critical demand for affordable housing,” he said.
He added that the lender had ensured the process would be straightforward for brokers. “We want brokers to see us as their first choice for a wide variety of buy-to-let cases, whether that’s standard private rentals, more complex HMO or MUFB lending, and now, social housing arrangements. With a clear process, minimal extra documentation, and support from our regional account managers, we’ve ensured this new option can be accessed by brokers with confidence.”
The change, the lender said, reflected its purpose of enabling home and property ambitions for everyone, while allowing advisers to place more diverse and socially valuable cases.
