Student Accommodation Development Finance
Student Accommodation Development Finance
The student accommodation market is growing rapidly, providing exciting opportunities with proven returns for developers seeking their next venture. Our property development finance options ensure you have the funds available to get your next project going in this thriving area of the real estate market.
What is Student Accommodation Development Finance?
Student accommodation development finance supports you with the development of existing or proposed student residences, including purpose-built student accommodation (PBSA).
The short-term loan can be used to assist businesses with the funding costs for a range of projects associated with student living, such as the renovation of flats and existing homes, as well as buying land to build new student accommodation.
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How Does Student Accommodation Development Finance Work?
Our fully-funded development loan is released against monitoring surveyor reports on your project. At first, this will be for the land where new student accommodation is built or where an existing property is to be converted or refurbished.
The properties permitted for this type of property development finance include newly built units such as houses, studios, and shared apartments in low- or high-rise blocks.
Who is Student Accommodation Development Finance For?
Our student accommodation development finance is for individuals, partnerships and UK corporate borrowing entities with a proven portfolio looking to fund their next student residency project.
However, due to the specialised nature of the student housing sector, there are other things to consider before applying for this loan.
We want the best for all our client ventures. As such, we will work with you to assess the university or universities served by your build to ensure occupancy levels give the best chance of securing a favourable return.
As part of your application, we will also consider the demographic of the local student population. Completion of the project should be well in advance of the new academic year.
We also offer student accommodation investment loans that can be exited to in cases where a reputable student accommodation provider is in place.
Key features
| Facility type | Fully-funded development loan - equity release considered on land purchases and planning gains |
|---|---|
| Minimum loan size | £2,000,000 |
| Maximum loan size | £45,000,000 |
| Max term | 36 months |
| Drawdown | Funds released against monitoring surveyor reports |
| Repayment | Rolled interest with bullet repayment on exit |
| Max LTC | 75% |
| Max LTGDV | 60% |
Lending criteria
Property types
- Permitted development and newly built units, including houses, studios, and shared apartments in low-or high-rise blocks
Borrower types
- Individuals, partnerships, and UK corporate borrowing entities
- UK-based ultimate owners
- Experienced with a demonstrable track record
Security
- First legal charge over the property
- Collateral warranties
- Debenture over the borrower
- Assignment over build contract
- Personal or corporate guarantees
- Other security as required
Tenure
- Freehold or long leasehold
Other things to consider
- We will consider the make-up of the local student population as part of your application
- Practical completion should usually be expected well in advance of the new academic year
- Can be exited to an investment loan where a reputable student accommodation provider is in place
Applying for Student Accommodation Development Finance
Your student property development loan will be based on the viability of the project and your business experience as a residential developer.
In other words, your project’s potential to produce revenue and profits must be evidenced. Finance will also be subject to the appropriate planning permission being held. The following steps outline the application process:
- An on-site visit to discuss your requirements
- We provide our non-credit-backed heads of terms
- If you’re satisfied with our terms, sign and return
- We submit to credit and receive a sanction
- Solicitors and valuers review all the legal requirements
- You’re ready to drawdown your loan
How we can help you?
We’re dedicated to helping you achieve your development goals with lending solutions tailored to meet your specific project needs.
We’re committed
We are committed to providing funding to help small to medium sized property developers and investors in the UK.
We’re responsive
Our experienced team can deliver fast, flexible lending decisions.
We’re reliable
As an established, well-funded and capitalised UK bank we will support investors’ and developers’ needs as they grow.
We’re personal
Our relationship led approach means your Relationship Director will manage the process through the life of the loan.