Hampshire Trust Bank (HTB) has announced its entry into the purpose-built student accommodation (PBSA) investment lending market through its Specialist Mortgages division. The move aims to expand the bank’s lending to residential landlords and investors, given the current shortage of student housing in the UK.
This decision leverages the experience amassed by HTB’s Development Finance team in the sector and will allow the bank to support more investors. The entry into the PBSA market comes on the back of a recent report by Savills, which highlighted that rising demand has resulted in record occupancy for PBSA. Firms like Empiric and Unite are forecasting growth rates of around 7%.
Adding heft to the bank’s new venture is the recent appointment of Senior Underwriter, John Laird, who joined HTB this August. Laird has over 30 years of experience in corporate finance and business banking and brings extensive knowledge of the PBSA sector.
PBSA proposals will be assessed in line with industry standards. HTB will focus on high-quality schemes tied to universities with solid fundamentals. The bank will lend at up to 75% loan-to-value (LTV) and from 125% gross interest cover ratio for select transactions where demand is proven.
Chris Daly (pictured), managing director of Specialist Mortgages at Hampshire Trust Bank, 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.”
Daly added that market demand is set to increase further. “Knight Frank analysis of ONS population projections, along with entry rates from UCAS, suggests 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.”
The bank caters to a range of investors, providing residential and semi-commercial loans up to £25m for limited companies, offshore entities, expats, and foreign nationals.
