It can lend at up to 75% LTV and from 125% gross ICR
Hampshire Trust Bank (HTB) has entered the purpose-built student accommodation (PBSA) investment lending market, demonstrating a strong appetite for growing lending to residential-led landlords and investors.
HTB said the entry of its specialist mortgages division into the PBSA market stemmed from, not only the current shortage of student housing across the UK, but also the existing experience that has been built by the bank’s development finance team in the sector.
The lender has also recently hired senior underwriter John Laird, who started with the bank in August and boasts over 30 years of experience in corporate finance and business banking, including extensive knowledge of the PBSA sector.
PBSA proposals, HTB said, will be assessed in line with standard industry considerations with a focus on high quality schemes which provide accommodation to universities with strong fundamentals. For select transactions where demand is proven, the bank will lend at up to 75% loan-to-value (LTV) and from 125% gross interest cover ratio.
“At HTB, we have a real appetite for growing our origination capabilities and proposition by examining new ways in which we can help our property investor clients,” commented Chris Daly (pictured), specialist mortgages managing director at Hampshire Trust Bank. “The PBSA market has proved to be much more resilient than other areas of the rental sector, despite being tested during the COVID-19 period, and can provide strong yields for investors.
“Market demand will only increase, with Knight Frank analysis of ONS population projections, along with entry rates from UCAS, suggesting there will be a 16% increase in total full-time undergraduate numbers from now until 2030, resulting in an increase of 263,000 students. As a result, we expect interest from larger investors looking to maximise their returns.
“Today’s announcement means we are now supporting those large or complex property investors in the student accommodation market who may have a combination of HMO and PBSA assets.”
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