A Birmingham property investor faced potential financial ruin after their management company collapsed, leaving them without rental income for eight months. This article examines how Prem Property’s guaranteed rent approach transformed a failing investment into a thriving supported housing property in Selly Oak, offering valuable lessons for UK landlords navigating today’s complex property market.
The Cost of Management Company Failure
Property management company insolvencies create devastating consequences for landlords. When this Birmingham landlord’s previous management company went bankrupt, they experienced:
- Eight consecutive months without any rental income
- Continued mortgage obligations totalling approximately £3,200-4,000
- Accumulating maintenance costs with no revenue to offset them
- Uncertainty about tenant welfare and property condition
- An uncontrolled HMO could face regulatory fines.
- Mounting stress and financial pressure
This scenario has become increasingly common as smaller management companies struggle with tightened regulations, rising costs, and economic pressures. The landlord’s six-bedroom HMO in Selly Oak—typically a profitable investment—had transformed into a financial liability overnight.
Why Guaranteed Rent Solutions Outperform Traditional Management
Traditional property management relies on occupied properties generating rental income that covers management fees and provides landlord returns. This model contains inherent vulnerabilities:
Income Volatility: Rental income changes according on how many people are living there, how reliably tenants pay their rent, and the time of year.
Management Company Risk: Smaller agencies might not have enough money saved up to survive through hard times, which could cause them to go bankrupt
Landlord Exposure: Landlords have to pay all of the fees right away when management companies go out of business, even though they don’t deal with the renters directly
Compliance Challenges: More complicated rules need specialised knowledge that many traditional agencies don’t have.
Guaranteed rent solutions fundamentally restructure this relationship. The management company leases the property directly from the landlord for an agreed term—typically three to seven years—providing fixed monthly payments regardless of occupancy, tenant behaviour, or market conditions.
This model puts all the operational risks on the management company and delivers landlords constant, passive income. For the Selly Oak property, this meant immediate transformation from eight months of zero income to stable monthly returns.
Supported Housing: Addressing the UK’s Critical Shortage
The UK faces an acute shortage of supported accommodation. Government statistics reveal alarming gaps between supply and demand:
- 28,190 households referred to safe accommodation services between April 2024 and March 2025 could not be supported
- Capacity constraints remained the primary reason (30%) why households were unable to access support
- Over 160,000 individuals currently occupy unsuitable supported housing
- There are still 13,000 patients in hospital beds who are medically fit but can’t find the suitable location to stay
- As of March 31, 2025, 131,140 households were living in temporary housing, the most ever
These statistics demonstrate both the scale of the crisis and the opportunity for property investors to generate returns whilst addressing genuine social needs.
Supported housing offers shelter for at-risk individuals who need extra supports, such as:
- People transitioning from homelessness to independent living
- Individuals with physical disabilities or mental health conditions
- Care leavers aged 18-25 requiring supported independence
- Domestic abuse survivors needing safe, stable housing
- Adults with learning disabilities or autism spectrum conditions
Supported accommodation properties usually have self-contained or shared living spaces with access to support services. This teaches people how to live on their own in the correct places.
Birmingham’s Supported Accommodation Opportunity
Birmingham presents particularly strong opportunities for supported housing investment due to several converging factors:
Population Growth: Birmingham’s population exceeded 1.2 million in 2024 and is projected to reach 1.24 million by 2030, driving consistent housing demand across all sectors.
Affordable Property Costs: The average price of a home in Birmingham is £234,000 (April 2025), which is less than in London and the Southeast. This makes it easier for investors to develop portfolios quickly.
Strong Rental Markets: With 60% of Birmingham’s rental market comprising young professionals aged 20-35, the city demonstrates robust demand across multiple accommodation types.
Local Authority Partnerships: West Midlands authorities actively seek private sector partners to provide supported accommodation, creating reliable referral pathways and stable tenancy arrangements.
Transport Infrastructure: Birmingham is still a great place to live for people who need access to jobs, schools, and healthcare because it has great road, rail, and HS2 connections.
The Selly Oak Advantage for Property Investment
Selly Oak is now one of the greatest places in Birmingham to invest since it has excellent fundamentals:
Exceptional Rental Yields: The B29 postcode delivers average yields of 7.5%—substantially above Birmingham’s city-wide average of 5.2%. The monthly rent for a six-bedroom house is between £1,050 and £1,421.
Diverse Tenant Markets: Selly Oak used to be mostly home to students from the University of Birmingham (38,820 students), but it is now becoming more popular with young professionals, families, and those living in supported housing.
Capital Growth Potential: Selly Oak properties have demonstrated consistent appreciation, with recent sales ranging from £390,000 to £745,000 for period properties.
Development Activity: The Birmingham Health Innovation Campus and ongoing university expansions signal continued area investment and growth.
Transport Connectivity: Selly Oak railway station provides direct access to Birmingham city centre in under 10 minutes, enhancing appeal for working residents.
Local Amenities: Established shopping areas, healthcare facilities, schools, and recreational spaces support diverse residential communities.
Selly Oak is a great place for supported housing since it has a well-developed infrastructure, good public transit for residents to go to services, and is close to healthcare and support service providers.
How Prem Property Transformed the Investment
Prem Property was founded in May 2019 and focuses on guaranteed rent solutions in Greater London and the West Midlands. Their intervention in this Selly Oak case involved several critical steps:
Immediate Financial Stabilisation: Prem Property structured a guaranteed rent agreement providing the landlord with fixed monthly income, immediately addressing the eight-month deficit and restoring cash flow for mortgage payments.
Property Assessment and Compliance: A comprehensive property assessment ensured the six-bedroom HMO met all regulatory requirements for supported accommodation, including safety certifications, licensing, and accessibility standards.
Conversion to Supported Housing: Utilising established relationships with local authorities and housing providers, Prem Property converted the property to supported accommodation, addressing the critical shortage whilst ensuring stable, long-term tenancies.
Full Management Assumption: The landlord transferred all management responsibilities to Prem Property, including tenant sourcing, support service coordination, property maintenance, and regulatory compliance.
Long-Term Lease Structure: A multi-year lease agreement provided the landlord with certainty and passive income whilst enabling Prem Property to plan sustainable supported accommodation services.
The transformation delivered immediate relief from the financial crisis whilst creating a socially beneficial investment aligned with UK housing priorities.
Financial Anatomy of Guaranteed Rent Arrangements
Understanding the financial structure helps landlords evaluate whether guaranteed rent solutions suit their circumstances:
Rental Income Comparison:
- Traditional HMO management: Variable income depending on occupancy, typically 85-95% of market rate after management fees and void periods
- Guaranteed rent: Fixed income at 80-90% of market rate, paid regardless of occupancy or tenant circumstances
Cost Structures:
- Traditional management: Landlord pays management fees (typically 10-15%), maintenance costs, compliance costs, and bears void period losses
- Guaranteed rent: Management company handles all costs; landlord receives fixed net payment
Risk Allocation:
- Traditional management: Landlord bears risks of void periods, tenant default, property damage, and maintenance costs
- Guaranteed rent: Management company assumes all operational risks
For the Selly Oak property, the guaranteed rent model delivered approximately £1,200-1,500 monthly (estimated based on market rates), providing reliable income after eight months of zero returns. Over a five-year term, this represents £72,000-90,000 in predictable income versus the uncertainty of traditional arrangements.
Regulatory Compliance in Supported Accommodation
Supported accommodation operates within complex regulatory frameworks requiring specialist expertise:
HMO Licensing: Properties housing three or more unrelated individuals sharing facilities require HMO licences. In 2024, HMO licence approvals nationally fell by nearly 6% due to stricter requirements, highlighting the compliance challenges landlords face.
Property Standards: Mandatory room sizes, fire safety requirements, and amenity provisions have intensified, requiring professional management to ensure compliance.
Support Service Coordination: Supported accommodation must provide or facilitate access to appropriate support services, requiring relationships with healthcare providers, social services, and specialist organisations.
Safeguarding Requirements: Properties housing vulnerable individuals must implement safeguarding policies and procedures, protecting both residents and landlords.
Funding and Benefits: Many supported accommodation residents receive Housing Benefit or Universal Credit, requiring proper administration and direct payment arrangements with local authorities.
Prem Property’s expertise in these areas protects landlords from potential penalties whilst ensuring properties meet all standards—a critical advantage following management company failure.
The Social Return on Investment
Beyond financial returns, supported accommodation investment generates measurable social value:
Homelessness Reduction: Each supported accommodation property potentially houses individuals who would otherwise occupy temporary accommodation, sleep rough, or remain in unsuitable housing situations.
Healthcare System Relief: Appropriate supported housing enables hospital discharges for the 13,000 medically fit patients currently occupying beds due to accommodation shortages, freeing critical NHS resources.
Crime Reduction: Stable housing correlates with reduced offending rates. Individuals in appropriate supported accommodation demonstrate better outcomes across multiple wellbeing indicators.
Economic Participation: Supported accommodation provides foundations for residents to access education, training, and employment, reducing long-term benefit dependency.
Community Strengthening: Well-managed supported accommodation integrates residents into communities with appropriate support, fostering social cohesion and reducing stigma.
For landlords increasingly interested in Environmental, Social, and Governance (ESG) considerations, supported accommodation offers concrete mechanisms to generate positive social impact alongside financial returns.
Market Dynamics Favouring Guaranteed Rent Growth
Several trends indicate guaranteed rent solutions will continue expanding across the UK:
Regulatory Intensification: Increasing complexity in property regulations—from HMO licensing to energy performance standards—drives landlords toward professional management solutions.
Economic Uncertainty: Following recent inflation, interest rate volatility, and cost-of-living pressures, landlords increasingly value income certainty over maximum yield.
Professionalisation: The property sector continues professionalising, with individual landlords seeking institutional-grade management solutions.
Supported Accommodation Demand: The gap between supported accommodation need and supply continues widening, creating sustained opportunities for appropriately managed properties.
Local Authority Partnerships: Public sector housing budgets remain constrained, driving authorities toward private sector partnerships for temporary and supported accommodation provision.
Recent data supports these trends. Average UK private rents increased by 8.7% in the twelve months to January 2025, whilst void periods in the West Midlands reduced from 24 days (November 2024) to 18 days (December 2024), indicating strong tenant demand and tight supply.
Comparing Guaranteed Rent Providers: Due Diligence Essentials
The Selly Oak landlord’s experience highlights the importance of selecting financially stable, reputable guaranteed rent providers. Essential due diligence includes:
Financial Stability: Verify the company maintains adequate reserves and insurance to guarantee rent payments throughout economic downturns. Request evidence of financial backing and insurance coverage.
Professional Memberships: Seek providers affiliated with professional bodies such as ARLA Propertymark, RICS, or National Residential Landlords Association, indicating commitment to industry standards.
Track Record: Investigate the provider’s history, client testimonials, and portfolio size. Established providers like Prem Property (founded 2019) demonstrate market credibility and operational stability.
Specialisation: Ensure the provider possesses genuine expertise in your property type. Supported accommodation, HMOs, and family homes each require specific knowledge and networks.
Contract Terms: Carefully review lease agreements, paying particular attention to rent review mechanisms, termination conditions, maintenance responsibilities, and dispute resolution procedures.
Insurance Requirements: Verify comprehensive insurance covering rent guarantee, contents, public liability, and professional indemnity.
Local Authority Relationships: For supported accommodation, confirm established partnerships with local authorities ensuring reliable tenant referrals and support service access.
Communication and Transparency: Assess the provider’s communication standards. Regular updates, accessible contacts, and transparent reporting indicate professional operations.
Thorough due diligence protects landlords from repeating the experiences that led to the Selly Oak property’s initial crisis.
Regional Opportunities Beyond Birmingham
Whilst Birmingham offers compelling opportunities, guaranteed rent solutions suit various UK markets:
London: Despite higher property costs, strong rental demand and local authority need for temporary and supported accommodation create opportunities, particularly in outer boroughs.
Other West Midlands Locations: Coventry, Wolverhampton, and Walsall present similar dynamics to Birmingham—affordable property costs combined with substantial housing need.
Northern Cities: Manchester, Liverpool, Leeds, and Sheffield offer strong rental yields with growing populations and local authority partnerships for supported accommodation.
University Towns: Locations with significant student populations (Oxford, Cambridge, Nottingham, Bristol) provide diversified opportunities for both traditional student HMOs and supported accommodation.
Coastal Regeneration Areas: Seaside towns experiencing regeneration often require temporary and supported accommodation, with local authorities actively seeking private sector partners.
The fundamental principle—transferring operational risk to professional managers in exchange for guaranteed income—applies across these varied markets, with specific opportunities depending on local supply-demand dynamics.
The Future of Supported Accommodation Investment
Several factors suggest supported accommodation will become an increasingly important investment sector:
Demographic Trends: An ageing population, increasing mental health challenges, and economic pressures driving homelessness all increase supported accommodation demand.
Policy Priorities: Both major political parties recognise housing shortages as critical issues, with supported accommodation central to addressing homelessness and reducing temporary accommodation costs.
Funding Structures: Local Housing Allowance rates and Universal Credit provisions increasingly accommodate supported living costs, improving financial viability.
Private Sector Partnerships: As public sector resources remain constrained, authorities increasingly partner with private investors for supported accommodation provision.
Professional Standards: The sector continues professionalising, with improved regulations, training standards, and quality frameworks attracting serious investors.
For landlords seeking stable returns whilst contributing to social priorities, supported accommodation represents a compelling option—particularly when accessed through guaranteed rent arrangements that eliminate operational complexities.
Lessons from the Selly Oak Transformation
The Selly Oak case study offers several valuable insights for property investors:
Act Decisively: Eight months of lost income could have been minimised through earlier intervention. When management problems arise, swift action limits financial damage.
Diversify Management Approaches: Traditional letting suits some properties and landlords; guaranteed rent suits others. Understanding both options enables informed decisions aligned with investment goals.
Consider Social Housing: The substantial gap between supported accommodation demand and supply creates opportunities for stable returns with social impact.
Value Professional Expertise: Specialist knowledge in supported accommodation, regulatory compliance, and local authority partnerships delivers value beyond basic property management.
Plan for Long-Term Stability: Guaranteed rent agreements typically span three to seven years, providing stable foundations for portfolio planning and expansion.
Conduct Thorough Due Diligence: Selecting the right guaranteed rent provider—financially stable, professionally operated, appropriately specialised—prevents future crises.
Conclusion: From Financial Crisis to Stable Investment
The transformation of this six-bedroom Selly Oak HMO demonstrates how guaranteed rent solutions can rescue landlords from difficult situations whilst addressing critical housing needs. Following eight months of devastating income loss after their management company’s bankruptcy, the landlord now benefits from:
- Fixed monthly income providing financial stability and mortgage coverage
- Complete elimination of management responsibilities and compliance burdens
- Professional operation as supported accommodation addressing the UK’s housing crisis
- Long-term lease providing certainty for financial planning
- Contribution to social value creation through quality housing for vulnerable individuals
Prem Property’s intervention exemplifies how professional guaranteed rent providers deliver triple benefits: landlord financial security, quality housing for vulnerable people, and relief for overstretched public services.
For the estimated 2.8 million private landlords across the UK, the Selly Oak case offers important lessons. Whether facing management challenges, seeking more passive investment structures, or interested in supported accommodation’s social impact, guaranteed rent solutions deserve serious consideration.
In today’s complex property market—characterised by intensifying regulations, economic uncertainty, and critical housing shortages—professional management partnerships represent increasingly attractive alternatives to traditional approaches. The right provider transforms properties from sources of stress and uncertainty into stable, socially beneficial investments.
If you’re a landlord experiencing void periods, management difficulties, or simply seeking more predictable returns from your property portfolio, guaranteed rent solutions may provide the answer. The Selly Oak success story proves that even after significant setbacks, professional partnerships can transform struggling investments into thriving assets that benefit landlords, tenants, and communities alike.
Prem Property delivers guaranteed rent solutions across the West Midlands and Greater London, specialising in HMOs, supported accommodation, and family homes. Established in 2019, they provide landlords with fixed rental income and comprehensive property management, addressing critical housing needs whilst ensuring stable investment returns. Their professional approach has earned recognition as the West Midlands’ leading guaranteed rent specialist.