What Is Specialist Supported Housing Investment?

Specialist supported housing (often abbreviated to SSH) is a type of accommodation for people who need some support to live independently. Residents may include adults with learning disabilities, autism, mental health needs or physical disabilities. The homes themselves are usually ordinary houses and apartments, sometimes adapted, located in residential neighbourhoods.

How supported housing differs from other housing

In supported housing, the accommodation and the support are linked. A landlord, typically a housing association, registered provider or charity, provides the home, while care or support is delivered to residents, often by a separate care provider commissioned by the local authority or NHS.

This differs from a care home, where accommodation and personal care are provided together under a single registration with the Care Quality Commission (CQC). In supported living, residents usually hold their own tenancy or licence and have the same legal status as other tenants.

How the rent is funded

Most supported housing residents claim help with their housing costs. For many supported housing schemes, those costs are met through Housing Benefit rather than the housing element of Universal Credit. This applies to what the regulations call "exempt accommodation": accommodation provided by a county council, housing association, registered charity or voluntary organisation where that body, or someone on its behalf, provides care, support or supervision to the resident.

Exempt accommodation is not subject to the standard Local Housing Allowance caps that apply to private rented housing, which is one reason rents in this sector can be higher than local private market rents. Rents must still be considered reasonable by the local authority that assesses the Housing Benefit claim.

Where private investors fit in

Housing associations and registered providers do not always own the homes they manage. A common arrangement is for a provider to lease properties from a private owner, often for a long term, and then grant occupancy to residents. The property owner receives rent from the provider under the lease, rather than from individual residents.

Under this model the investor owns the freehold and the provider becomes the tenant under a commercial lease. The terms of that lease, including its length, rent review arrangements and who is responsible for repairs, determine the investor's income and obligations.

Who regulates the sector

Registered providers of social housing in England are regulated by the Regulator of Social Housing (RSH). The regulator publishes regulatory judgements on individual providers, covering governance and financial viability, and these are publicly available on GOV.UK.

The regulator has published commentary on providers using lease-based models, highlighting the risks that can arise when a provider takes on long, inflation-linked lease commitments while relying on rental income that may not rise in the same way. A number of lease-based providers have received non-compliant regulatory judgements. Investors should review the current published position of any provider they would be relying on.

The Supported Housing (Regulatory Oversight) Act 2023 gave the government powers to introduce National Supported Housing Standards and a licensing regime for exempt accommodation, administered by local authorities. Investors should be aware that the regulatory framework for the sector is developing.

Key points for investors

• The rental counterparty is normally an organisation, not an individual resident.
• Income depends on the lease terms and on the counterparty's financial strength.
• Rents in exempt accommodation are funded largely through Housing Benefit and are subject to local authority scrutiny.
• Regulatory judgements on registered providers are public and should form part of due diligence.

Sources

Housing Benefit (Consequential Provisions) Regulations 2006, Schedule 3; Regulator of Social Housing publications on GOV.UK; Supported Housing (Regulatory Oversight) Act 2023.