Atom bank has provided a £2.7m commercial loan to finance a newly converted purpose built student accommodation (PBSA) scheme in Leicester, following a sharp rise in investor interest in the sector.
The property, previously a pub, has been transformed into a 55-unit apartment block for students. The borrower, an experienced landlord with a portfolio of more than 50 residential properties, is diversifying into student and commercial accommodation, supported by a background in supported living.
The loan was arranged by Shannon Harwood, head of bridging and commercial at Premier Commercial Lending, who said Atom bank stood out from other lenders due to its clear terms and proactive support. “My previous positive experience with Atom bank meant I was confident they would be able to support this borrower, and they did not disappoint.
“The BDM team, in particular Emma Vardy, were incredibly supportive and quick to respond to issues, while the underwriters were very proactive, ensuring progress did not slow down post-offer.
“Assessing the valuation can sometimes drag on for weeks, yet Atom bank reviewed it within 24 hours, which is unheard of.
“The way Atom bank issues terms is incredibly professional compared to other lenders in this space, which really helps provide the client with confidence ahead of receiving a formal offer. I look forward to working with Atom bank on more PBSA deals this year as more investors look to move into the space.”
The bank offered a 5-year fixed rate of 8.1% at 62% LTV. It recently improved its PBSA lending criteria, now offering up to £5m at 75% LTV and £10m at 70% LTV, subject to credit quality.
This update gives it a competitive edge over HMO terms, at a time when demand for student accommodation is outstripping supply. Research from CBRE shows record-high occupancy across the PBSA market, while ONS data reveals a 9.5% decline in the number of HMOs since 2018.
Neil Findlay, regional BDM at Atom bank, said: “PBSA is becoming more attractive as an asset class, with higher returns than many other forms of commercial property as well as a clear need from the nation’s student population.
“This case demonstrates our determination to support those active in this space, and by improving our proposition we will be able to work with a broader number of both owner-occupiers and property investors in the PBSA market.”
