Property investment in the UK boils down to choices. And if you’re weighing up your options, social housing developments and Assured Shorthold Tenancies (AST) properties are likely on your radar.
The differences matter. With social housing, you’re leasing to councils or housing associations, who then find and manage the tenants. Think steady income with fewer surprises.
ASTs put you in the traditional landlord role – finding tenants, handling repairs, and dealing with the occasional late-night call about a leaky tap.
We’ve seen investors thrive with both models, but success depends on matching the right approach to your personal investment style. Are you after hands-off passive income, or do you want more control over your property portfolio?
Investing in Social Housing vs Assured Shorthold Tenancies: At a Glance
| Factors to Consider | Social Housing | Assured Shorthold Tenancies |
| Provider | Housing associations or local councils | Private landlords (default) or housing associations (less common) |
| Tenancy Types | – Assured Tenancy – Fixed-term (5+ years)- Starter tenancy (12 months) | Fixed-term (6-12 months standard, up to 10 years possible) |
| Security of Tenure | Lifetime security for assured tenants. Fixed-term reviews every 5 years | Fixed-term only. Periodic tenancy after fixed term. |
| Eviction Process | Requires a court order for breach of agreement | Section 21 (no-fault eviction) after the fixed termSection 8 for breaches |
| Rent Structure | Social rent (50-60% market rates) | Market rent or higher |
| Tenant Profile | Vulnerable groups/ low-income households, like those who have disabilities or are experiencing homelessness | General population |
| Regulatory Environment | Strict allocation policies Tenancy succession rights | Deposit protection schemesRepairing obligations |
| Investor Considerations | Stable long-term incomeCommunity impact focus | Higher rental yieldsMarket-driven flexibility |
Social Housing
Investing in social housing is a distinctly different approach compared to traditional rentals. Rather than marketing your property to individual tenants, you’ll lease it to a housing association or local authority, which handles everything else. This creates a unique investment profile with specific advantages that appeal to hands-off investors looking for stability and high yields.
The demand for social housing has never been higher. There is a massive shortage of affordable housing in the UK in 2025, with 1.2 million households on social housing waiting lists nationwide. This presents an opportunity for investors to make a meaningful difference while securing stable, long-term returns on their property investments.
| Pros | Cons |
| Long-term contracts (typically 3-7 years) | Lower rental yields compared to ASTs |
| Guaranteed rent (paid even during void periods | Limited control over tenant selection |
| Minimal landlord involvement | Properties may experience more wear and tear |
| High rental yields of 9% | Higher initial tax implications |
| Reduced maintenance responsibilities | Opinion of the sector is often stigmatised |
Guaranteed Income Stream
The standout feature of social housing investment is income stability. Unlike private rentals, your payments don’t stop when a tenant moves out. Housing associations typically guarantee your rental income for the full contract term, whether the property is occupied or not.
For investors who value predictability, this removes one of the biggest headaches in property investment: void periods. You can plan your finances knowing exactly what you will earn and when, without the anxiety of wondering if a tenant will pay on time.
This guaranteed income makes mortgage approval more straightforward too, as lenders love seeing consistent, reliable revenue streams.
Hands-Off Management
Want the benefits of property investment without the day-to-day hassles?
Once your property is leased to a housing association, they handle everything from finding suitable tenants to managing repairs and maintenance issues. Your phone won’t ring about a broken boiler at midnight, and you won’t spend weekends showing the property to potential renters.
This hands-off approach is ideal for investors with limited time or overseas investors. The housing association handles the management professionally, letting you focus on your next investment instead of tenant problems.
Social Impact
Beyond the financial benefits, social housing investment delivers something many other investments can’t: genuine social good.
Your property provides a stable home for individuals or families struggling to find suitable accommodation. With the UK facing a serious housing shortage, particularly in the affordable sector, your investment directly addresses a pressing social need.
For investors who want their portfolio to reflect their values, social housing offers returns that go beyond just the financial. You’re creating housing stability in communities while still maintaining a profitable investment.
Assured Shorthold Tenancies (ASTs)
ASTs are the most common tenancy agreement in the UK’s private rented sector, used by 73% of private renters, as this became the default tenancy type in the UK from 1997.
As a traditional route into property investment, Assured Shorthold Tenancies (ASTS) put you in the driving seat as a private landlord. You’ll be renting directly to tenants in the open market, giving you more control but also more responsibility.
| Pros | Cons |
| High potential rental yields | No guaranteed income during void periods |
| Full control over tenant selection | Active management required |
| Flexibility to adjust rent or sell | Direct responsibility for property maintenance |
| Freedom to make property improvements | Risk of rent arrears |
| Opportunity to target high-demand rental areas | Need to stay compliant with changing regulations |
Higher Rental Income
The most compelling advantage of ASTs is straightforward: money in your pocket. In England, gross social rent is on average 38.8% of average private sector rent.
This higher yield potential comes from your ability to charge market rates and adjust them in line with demand. When the rental market heats up, you can increase rents at tenancy renewal to capitalise on those market conditions – something that’s not possible with the fixed-term agreements of social housing.
For investors looking to maximise returns on their property investment, particularly in high-demand areas, the potential for premium rents can make ASTs extremely attractive.
Control and Flexibility
ASTs put you firmly in control of your investment. You decide who lives in your property, how much to charge, and when to make changes (if you have a rent review clause in the tenancy agreement). This level of control extends to every aspect of your property investment journey.
Want to sell the property? You can do so at the end of the tenancy agreement without complex negotiations with housing associations. Need to move back in yourself? That’s an option too. Planning to renovate and increase the property value? The choice is yours.
This flexibility makes ASTs particularly appealing to investors who value having options and the ability to change their strategy as market conditions or personal circumstances change.
Capital Growth Potential
While both investment routes can benefit from property value increases, ASTs often have the edge when it comes to capital appreciation. With complete control over renovations and improvements, you can strategically upgrade your property to boost its market value.
ASTs allow you to target properties in up-and-coming areas with strong growth potential rather than being limited to locations where social housing is in demand. This targeting can significantly impact your long-term returns as property values climb.
For investors focusing on building wealth through capital growth rather than just rental income, the freedom to buy in growth hotspots and add value through improvements makes ASTs a compelling choice.
Which is a better property investment: social housing or ASTs?
Social housing and ASTs aren’t competing for the same crown – they’re designed for different types of investors with different goals. Choosing between them isn’t about finding the “best” option but the right match for your investment personality.
Social housing wins hands down if you’re seeking:
- Predictable, guaranteed income without surprises
- Truly passive investment with minimal time commitment
- Freedom from tenant management
- A more ethical investment aligned with social values
- Protection from short-term market fluctuations
ASTs come out on top when your priorities are:
- Maximising your rental yield potential
- Maintaining full control over your property
- Flexibility to change strategy or exit quickly
- Opportunities to force appreciation through improvements
- Building a portfolio with diverse options
Your investment timeline matters too. ASTs might generate more income month-to-month, but factor in the costs of void periods, tenant issues, and management time. Social housing often balances out when you consider its guaranteed income and reduced expenses.
Many successful property investors eventually include both models in their portfolio. Beginning with social housing provides stability and experience, while adding ASTs later can boost returns once you’re comfortable with more active management.
The best choice ultimately depends on your financial goals, risk tolerance, and how hands-on you want to be.
Become a Hands-Off Social Housing Landlord with Yield Investing
At Yield Investing, we’ve helped hundreds of investors access the stability and passive income that social housing offers, without the complexity typically associated with this specialist market.
We identify properties in high-demand areas with sustainable prospects, and our extensive network means your property can be placed quickly, giving our investors an advantage when entering the social housing sector. From lease negotiations to ongoing maintenance, we handle every aspect of your investment, making it genuinely hands-off.
We ensure your property meets all current and anticipated regulatory requirements, protecting your investment from compliance issues and giving our investors peace of mind in an increasingly regulated sector. You won’t need to worry about day-to-day management, unexpected challenges, or staying on top of changing legislation.
Ready to explore how social housing could fit into your investment strategy? Contact our team today to discover the opportunities waiting for you in this rewarding sector.
