"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."
Hampshire Trust Bank has entered the Purpose-Built Student Accommodation (PBSA) investment lending market.
Entry in to the PBSA market stems from the current shortage of student housing across the UK, alongside the existing experience that has been built by the Bank’s development finance team in the sector, leading to a healthy pipeline of PBSA deals.
This comes off the back of a recent report by Savills, which stated that for both investors and operators, rising demand has resulted in record occupancy for PBSA with both Empiric and Unite forecasting growth of around 7% and, in markets facing even more acute supply and demand pressures, rental growth will likely exceed that level.
The Bank’s entry into PBSA is supported by the recent hire of senior underwriter, John Laird, who boasts over 30 years of experience in corporate finance and business banking, including extensive knowledge of the PBSA sector.
PBSA proposals 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, HTB will lend at up to 75% LTV and from 125% gross interest cover ratio.
Chris Daly, managing director of specialist mortgages at Hampshire Trust Bank, commented: “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% 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.”
