Home / market updates / A Personal Journey into Supported Living Investment – Dean Birks

A Personal Journey into Supported Living Investment – Dean Birks

22 May 2025

Author: Adam Camm

My own journey into supported living investment began in 2015 when I purchased a former mill in Staffordshire, which had been utilised more recently as the head office of a business that had gone into liquidation. Following a detailed planning application to the local council, I converted the commercial building (using bridging finance) into six self-contained apartments. Shortly after works began and via my principal contractor, who was carrying out the build under a JCT, I was approached by a residential provider who expressed a desire to lease all six units on a five-year Full Repairing and Insuring (FRI) lease. It was an eye-opening opportunity that highlighted the potential of supported living as both a socially impactful and financially viable investment.

Following practical completion of the block of apartments, I found there were a very small number of lenders who were willing to support this type of arrangement. By this time, I had been in property finance for over 10 years, and I hadn’t yet come across this area of property finance. This is where Signature’s Supported Living finance journey began, resulting in our commitment to better understanding this space and in turn, help investors secure appropriate supported living mortgages. I have used my own personal experiences to evolve our offering for Supported Living Finance, leading Signature Specialist Finance to become one of the foremost providers of supported living mortgage brokers in the UK.

Since then, the landscape has expanded somewhat. Today, there are almost 4 times as many lenders offering supported living finance in various forms, and we are actively engaged in discussions to help even more lenders develop tailored supported living products to bring to the market.

The Costs to Consider for Supported Living Mortgages and Tenancies

Supported living is an essential housing solution for individuals with additional needs, providing them with a safe and stable environment while allowing them to live as independently as possible. However, investing in supported living properties requires careful financial planning. Whether you are a landlord, investor, or an organization providing supported housing, understanding the various costs involved is crucial. Here’s a breakdown of the key expenses to consider.

  1. Mortgage Costs

Interest Rates & Loan Structure
Supported living properties often require specialist mortgages, which can come with higher interest rates compared to standard buy-to-let loans. Lenders may also require a higher deposit, typically around 25–40%, due to the perceived higher risk of these arrangements. The structure of the loan (interest-only vs. capital repayment) will also affect monthly costs.

Arrangement Fees
Most lenders charge arrangement fees, which can range from 1–5% of the loan amount. These fees should be factored into upfront costs.

Valuation & Legal Fees
Lenders require property valuations, which may be more expensive for supported living properties due to the need for additional assessments, dependent on the level or care required on site at the time. Legal fees for securing the mortgage can also add to the overall cost.

  1. Property Adaptation and Maintenance

Adaptations for Accessibility
Properties in the supported living sector can sometimes require modifications such as wheelchair access, wet rooms, reinforced walls, and emergency call systems. These adaptations can cost anywhere from a few thousand pounds to tens of thousands, depending on the needs of the tenants.

Ongoing Maintenance
Due to higher wear and tear, maintenance costs can be greater than those of a standard rental property. Investors should budget for regular repairs, upgrades, and compliance with health and safety regulations. Although the detail within the lease is paramount to ensure that the responsibilities and obligations of both the tenant and the landlord are clearly detailed.

  1. Insurance Costs

Specialist Landlord Insurance
Standard landlord insurance may not cover supported living tenancies. Specialist policies, which provide coverage for adapted properties and higher liability risks, are typically more expensive.

Rent Guarantee Insurance
While many supported living tenancies are backed by housing associations or local authorities, securing rent guarantee insurance can provide extra peace of mind, particularly for private landlords.

  1. Compliance and Regulatory Costs

Licensing & Planning Permission
Some local councils require landlords to obtain a specific license for supported living properties. Planning permission might also be necessary for significant adaptations.

Health & Safety Compliance
Fire safety regulations, gas and electrical safety checks, and infection control measures must all be adhered to, which can involve annual inspections and certification fees.

  1. Tenant Management Costs

Void Periods
While supported living tenancies can be long-term and stable, void periods can still occur, albeit it far less common, if set up correctly. However, budgeting for gaps in tenancy is essential and the devil is in the detail of the lease.

Management Fees
Typically there are no management fees applicable in supported living properties.

  1. Utility and Service Costs

Inclusive vs. Excluded Bills
Some supported living agreements require landlords to cover utility bills, council tax, and internet costs, although in most cases they are included within the lease agreement and covered by the Residential provider or within the service level agreement between the residential provider and the care provider. Understanding whether these expenses are included in tenancy agreements is key to financial planning.

Additional Support Services
Depending on the level of care required by the incoming CP (Care Provider), some properties may need on-site support staff, security, or maintenance personnel, which can increase operational costs and will also determine which lender will and won’t provide a mortgage facility.

On-site care and live-in care both provide care in the recipient’s home, but differ in the level of care, the carer’s presence, and cost. Live-in care involves a carer staying in the home, often providing 24/7 care, while on-site care (also known as hourly or domiciliary care) involves a carer visiting for specific periods to provide assistance.

Understanding the difference between the above will determine who will lend and who won’t.

Key aspects to consider.

The lease is quite possibly the most important piece of the jigsaw, not only for the correct type and level of funding but also from an investment perspective. Enlisting the services of a professional (such as a solicitor) regarding the creation of the lease and/or a review of the lease presented to you by an RP (Residential Provider) is key. It may cost a little money but that will be the best money you will spend.

Ensure your mortgage broker has strong relationships with the lenders and their underwriters and a good understanding of their specific supported living criteria. They should be presenting the lease to them at the very earliest convenience, in order to get a steer from the lender, if the case is for them. This is on top of the usual lender expectations and criteria. You don’t want to get 2 months down the line and be told you’re not eligible for a mortgage, if that could have been determined much earlier on.

Engage with an RP or CP as soon as possible, once you have a project for them to consider. Taske time understanding their requirements and build a relationship with them to ensure that further projects can be delivered, if needed. Remember, this needs to be a long-term relationship and transparency is key.

Do your own due diligence on the potential tenants and the organisations that you are working with, just as I would expect them to do the same with you.

Do not be tempted to put supported living tenants into a property without the correct type of mortgage and insurance in place. You are not only jeopardising your relationship with the organisations that you work with but most importantly you put the tenants who need to accommodation the most at risk. Not to mention that this will undoubtedly reduce your chances of securing finance on future properties. Lenders both in and out of the SL space are paying particular attention to who is residing in the properties that they hold a charge over.

Conclusion

Investing in supported living properties can provide stable and socially beneficial returns, but it is essential to account for the unique costs associated with this sector. Understanding mortgage expenses, property adaptations, insurance, compliance requirements, and tenant management fees will help investors and landlords plan effectively and ensure long-term success in the supported living market.

Through my own investment portfolio, I work with a number of care providers (CPs) and registered providers (RPs), whom I trust, and who trust me to deliver quality housing for their tenants. This mutual trust is built on years of experience and a clear understanding of the responsibilities that come with supported living.

As both an experienced investor in this space and managing Director at Signature Specialist Finance, I’ve had a front-row seat to the sector’s growth and evolution. Signature has helped and continues to help numerous clients secure finance for supported living projects, whether they’re just getting started or scaling up. The volume of leases, providers, and lenders we interact with puts us in a unique position to advise, connect, and guide you through the process.

So, if you’re considering investing in supported living or expanding your portfolio, speak to a team that truly understands the sector from both sides. We don’t just talk about supported living—we live and breathe it.

 

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