Hampshire Trust Bank enters purpose-built student accommodation market

The lender said this was a sign of its appetite for lending to residential landlords and investors. 

HTB said its development finance team had existing experience in the student housing sector which would create a “healthy pipeline” of deals. This includes the recent appointment of John Laird in August, who brought 30 years of experience in corporate finance, business banking and the PBSA sector to the role. 

The lender also noted that there was a shortage of student housing in the UK which led to its desire to support investors in the market. 

Where demand for student housing has been demonstrated, HTB will lend up to 75 per cent loan to value (LTV) and 125 per cent gross interest coverage ratio (ICR). 

Chris Daly (pictured), managing director, specialist mortgages at HTB, said: “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. 

“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 per cent increase in total full-time undergraduate numbers from now until 2030, resulting in an increase of 263,000 students.” 

Daly added: “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 houses in multiple occupation (HMO) and PBSA assets.”