Supported living calculator
Buy a house, adapt it if the provider needs it, and lease it to a registered provider, housing association, council or care provider on a long lease. See the yield and cash flow against letting the same house as a standard buy-to-let, what you’re exposed to if the provider leaves, and what changes if the rent is lower. If you lease the house from its owner instead, switch to the second mode.
Results
Net cash flow
£1,054/mo
£12,651 a year after the mortgage, in year one.
Yields
13.0%
Gross. Net 12.6%; yield on cost 11.2% with the adaptations.
DSCR
2.93×
Net income over the mortgage payments.
Payback on adaptations
13.3 months
From the extra cash flow over a standard let.
Uplift on a standard let
£900/mo
The lease rent is 83% above the market rent for the same house. Ask the provider how its rent is funded before relying on it.
| Year one | Supported living | Standard BTL |
|---|---|---|
| Rent | £1,650/mo | £900/mo |
| Gross yield | 13.0% | 7.1% |
| Net income | £19,206/yr | £8,406/yr |
| Cash flow after the mortgage | £1,054/mo | £154/mo |
| Cash in | £57,500 | £45,500 |
Lease-end exposure
£10,182
4.9 months of the final rent if the provider leaves at the end: 3 months re-letting plus £4,000 to reinstate. Then cash flow falls by £1,298/mo to £154/mo as a standard let.
Sensitivity
£734/mo
Cash flow at the lower rent you chose to test.
At a rent 20% lower (£1,320/mo), cash flow is £734/mo with a DSCR of 2.34. The rent that just covers the mortgage is £563/mo.
| Provider leaves after | Term cash flow | Less than the full lease |
|---|---|---|
| Runs the full term | £149,622 | – |
| 1 year | £23,209 | £126,414 |
| 2 years | £34,489 | £115,134 |
| 5 years | £71,332 | £78,291 |
Cash flow over the lease
£149,622
Over 10 years with reviews. The lease rent reaches £2,061/mo in the final year.
| Year | Lease rent | Cash flow |
|---|---|---|
| 1 | £1,650/mo | £12,651 |
| 2 | £1,691/mo | £13,131 |
| 3 | £1,734/mo | £13,623 |
| 4 | £1,777/mo | £14,128 |
| 5 | £1,821/mo | £14,645 |
| 6 | £1,867/mo | £15,175 |
| 7 | £1,913/mo | £15,718 |
| 8 | £1,961/mo | £16,275 |
| 9 | £2,010/mo | £16,846 |
| 10 | £2,061/mo | £17,431 |
A worked example on a £1,650/mo lease rent. It isn’t what any provider pays: lease rents vary with the home, the residents’ needs and how the provider is funded. Agree yours in writing. Information, not advice.
Results
Profit
£401/mo
Year one. Averages £483 a month over the lease with reviews.
Payback on adaptations
26.2 months
Inside the 60-month provider lease? Yes.
Yield on cost
45.8%
Year-one profit on the £10,500 you put in.
Rent cover
1.43×
Provider rent over the rent you pay. £594 a year allowed for voids and covenant risk.
Break-even provider rent
£1,237/mo
The year-one provider rent at which the lease makes nothing.
Lease-end exposure
£2,500
The leases end together. If the provider doesn’t renew, you carry the £2,500 reinstatement.
Profit over the lease
£18,453
Over 5 years after the upfront cost, before lease-end exposure. Provider rent reaches £1,821/mo in the final year.
| Year | Provider rent | Profit |
|---|---|---|
| 1 | £1,650/mo | £4,806 |
| 2 | £1,691/mo | £5,286 |
| 3 | £1,734/mo | £5,778 |
| 4 | £1,777/mo | £6,283 |
| 5 | £1,821/mo | £6,800 |
A worked example on £1,650/mo provider rent. Provider rents vary with the home, the residents’ needs and the commissioning council; agree yours in writing. Information, not advice.
Compliance and risk
0 of 10 checked
What to check and where, in plain English. Information, not legal or financial advice. Tick each one off as you confirm it for this house.
If the provider says it is a registered provider, find it on the Regulator of Social Housing's register; if it delivers personal care, check its CQC registration for that service.
GOV.UK: registered providers of social housing (opens in a new tab)Care Quality Commission (opens in a new tab)
Residents' housing costs are often met by housing benefit as exempt or specified accommodation, which is why a lease rent can sit above the market rent; ask the provider how its rent is funded and what happens to the lease if that funding changes.
GOV.UK: Housing Benefit guidance for supported housing claims (opens in a new tab)
The Act lets councils bring in licensing and national standards for supported exempt accommodation; check the current position with the council before you commit.
legislation.gov.uk: Supported Housing (Regulatory Oversight) Act 2023 (opens in a new tab)
Residents living as a household is usually C3 (dwelling house), but a home whose main purpose is care can be C2 (residential institution), so ask the council's planning team whenever the number of residents or the level of care changes the use.
Three or more unrelated residents sharing a kitchen or bathroom can make the house an HMO, and larger ones need a licence unless an exemption applies, so check with the council, including any additional licensing scheme.
Most buy-to-let mortgages forbid a lease to a company or provider, so get the lender's written consent to this lease, or use a specialist lender that lends on provider leases.
Check who insures under the lease, that the policy covers this use and these occupiers, and how the premium is recharged, and tell the insurer before the lease starts.
Residents may need help to leave in a fire, so agree who keeps the fire risk assessment and evacuation plans up to date, and get building regulations approval for any adaptation that needs it.
GOV.UK: fire safety responsibilities (opens in a new tab)GOV.UK: building regulations approval (opens in a new tab)
Who pays council tax, and whether a discount or exemption applies, depends on how the house is occupied, so ask the council and set out in the lease who is liable.
Read the provider's latest accounts and, for a registered provider, its regulatory judgement; ask how many homes it runs and for how long, how much of its income comes from one council, and whether a parent company will guarantee the lease.
Companies House: search the register (opens in a new tab)GOV.UK: regulatory judgements and notices (opens in a new tab)
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