In recent years, a growing number of private landlords have been approached by government contractors, such as Serco, Mears, and Clearsprings Ready Homes, to lease their properties for use as accommodation for asylum seekers. These arrangements, often under the Home Office’s Asylum Accommodation and Support Services (AASC) contracts, can appear very attractive at first glance. They frequently offer long-term leases, guaranteed rent, and no void periods, which are compelling propositions for landlords seeking financial stability in an uncertain rental market.
However, beneath these advantages lies a complex and often misunderstood challenge: obtaining appropriate landlord insurance. Many insurers remain hesitant, or outright unwilling, to provide cover for properties used to house asylum seekers, even when managed by reputable contractors. For landlords exploring this opportunity, it’s crucial to understand both the risks and the insurance implications before signing on the dotted line.
Working with Government Asylum Housing Providers
Serco, Mears and Clearsprings are the three principal contractors responsible for providing housing to asylum seekers across different regions of the UK. These companies lease properties directly from private landlords or letting agents and take on the responsibility for property management, maintenance, and tenant placement under their contracts with the Home Office.
In practical terms, a landlord enters into a fixed-term lease, typically five years, with one of these organisations. During that period, the contractor becomes the tenant of record, managing occupancy and ensuring compliance with accommodation standards. Rent is paid regularly to the landlord regardless of whether the property is occupied, and many of the usual responsibilities associated with tenancies, such as finding tenants or handling minor repairs, are absorbed by the contractor.
This structure has parallels with “guaranteed rent” or “rent-to-rent” schemes, where an intermediary leases the property and sublets it to end tenants. The difference is that these companies operate under government-backed agreements and focus on housing a specific and often vulnerable group, individuals seeking asylum in the UK.
From a landlord’s perspective, it’s easy to see the appeal: consistent income, minimal involvement, and an apparently low risk of rent arrears. Yet from an insurer’s standpoint, the situation is not as straightforward.
Why Insurers are Cautious About Asylum Seeker Accommodation
The primary challenge with insuring properties let through Serco, Mears, or Clearsprings lies in the nature of the tenancy and the perceived risk profile associated with it. These are non-standard tenancy arrangements, typically not assured shorthold tenancies (ASTs), and the ultimate occupants, being asylum seekers, are individuals about whom insurers have no background information or references.
Although the contractors take on management responsibilities, the insurers see increased exposure in several areas. Multiple occupancy is common, and in some cases, properties are converted to shared or HMO-style use. This can introduce higher wear and tear, greater potential for accidental or deliberate damage, and added fire safety obligations. Some insurers also express concern over the ability to recover costs or pursue claims if damage occurs, particularly when the end occupants are not legally tenants in the traditional sense.
Another complicating factor is that contracts with these organisations can include specific insurance requirements, for instance, clauses stipulating that the policy must “note use for asylum accommodation” or explicitly acknowledge that the property is leased to one of these government contractors. Failure to meet these conditions could invalidate both the contract and the insurance cover, yet not all landlords are aware of this until issues arise.
In short, many insurers treat this as a specialist risk, grouping it alongside supported housing or social housing for vulnerable tenants. That classification can lead to restricted cover, higher premiums, and tighter conditions. In some cases, insurers may decline altogether if the property is being used under an asylum housing scheme.
Declaring the Use to Your Insurer
One of the most important steps for any landlord considering letting to Serco, Mears, or Clearsprings is to fully disclose the intended use of the property to their insurer. Non-disclosure, even if accidental, can result in a claim being rejected or the policy being voided. It’s not enough to describe the property simply as “let to a tenant” or “used for residential purposes”; the insurer needs to understand the specific arrangement and who will occupy the premises.
A responsible insurer or broker will ask detailed questions about the tenancy agreement, the organisation involved, and the type of occupants expected. They may also request copies of contracts or clauses that reference insurance obligations. This can initially feel intrusive, but it’s essential for the insurer to accurately assess the risk. Declaring these details upfront ensures that any policy issued is fit for purpose and compliant with the conditions of the lease.
Common Insurance Difficulties Landlords Encounter
Many landlords first realise there’s an issue when their existing insurer refuses to renew a policy or withdraws cover once they disclose that the property is being used under an asylum housing scheme. Even where cover is offered, the terms can vary widely.
Some policies exclude cover for malicious damage by tenants or restrict loss-of-rent protection. Others impose higher excesses or limit the insurer’s liability for claims related to shared or communal areas. Certain insurers will only cover the buildings, not the contents or fittings, especially if these are owned or maintained by the contractor.
It’s also worth noting that these properties may require additional forms of compliance, such as HMO licensing, fire safety inspections, and regular maintenance checks. If these obligations are not met, a claim could be denied. Because these homes often house multiple unrelated individuals, they attract closer scrutiny under housing and safety legislation, which insurers take into account when setting terms.
Working with an Experienced Insurance Broker
Given these complexities, landlords are best served by working with an experienced insurance broker who understands this niche market. A specialist can identify insurers who are open to providing cover for properties leased to Government Asylum Housing Providers and can negotiate suitable terms on the landlord’s behalf.
While premiums may be higher than standard buy-to-let policies, the key is ensuring that the cover genuinely protects the landlord’s investment. This includes not only the building itself but also liability cover, protection against legal disputes, and clarity over who bears responsibility for damage or repairs.
A good broker will also help the landlord interpret the insurance clauses within the lease agreement, ensuring that any requirements, such as noting the property’s use or naming the contractor on the policy schedule, are met. It’s a small detail that can make a significant difference if a claim ever needs to be made.
Where possible, landlords should clarify in writing with the contractor who is responsible for specific repairs, routine maintenance, and safety checks. This reduces the likelihood of disputes later on and strengthens the landlord’s position in the event of a claim.
Landlords should also be prepared to accept that premiums may be higher or that some cover types will be limited. The peace of mind that comes with comprehensive, compliant insurance often outweighs the marginal increase in cost. Attempting to save money by not disclosing the property’s true use can prove far more expensive in the long run.
It’s also important to check that the property’s mortgage conditions allow for this kind of tenancy. Some lenders restrict or prohibit non-standard leases or subletting to third-party organisations. Failing to obtain the lender’s consent could breach mortgage terms, even if the rent is guaranteed.
Getting the Right Insurance for Asylum Housing
Letting a property to a Government Asylum Housing Provider can be a sound and socially valuable investment, offering financial stability and a guaranteed income stream. Yet it’s not a conventional tenancy, and the insurance market reflects that reality. The key to success lies in transparency, preparation, and specialist advice.
Before entering into any agreement, landlords should speak with their insurance provider or broker to confirm what cover is available and under what terms. The goal should always be to secure a policy that recognises the property’s specific use, protects the landlord’s interests, and aligns with the requirements of the contractual arrangement.
As demand for asylum accommodation continues to rise, more landlords will consider working with these government contractors. Those who approach the opportunity with the right understanding and the right insurance can benefit from a stable long-term arrangement while contributing to an essential public service.
At Ashburnham Insurance, we understand that not every tenancy fits the standard mould. If you’re considering leasing your property to a Government Asylum Housing Provider like Serco, Mears, or Clearsprings, our experienced team can help you find the right landlord insurance to suit your arrangement. We work with a range of trusted insurers and know which will consider this type of use, helping you secure cover that’s both compliant and comprehensive.
Get in touch with us on FREEPHONE 0800 1696137 to discuss your property and explore your options. We’re here to make specialist landlord insurance straightforward and stress-free.