Development Finance For Student Accommodation

There would appear to be a significant number of new purpose built student accommodation development projects either on the go or going to happen in the future in various parts of the UK. This is despite the fact that a lot of students choose to live at home to save money. No doubt some of those companies involved in such rental projects will be seeking development finance towards the building costs.

Here in the UK there are more and more buildings being built to accommodate university students so development finance is available for such projects from some lenders
The UK is witnessing an increasing number of purpose built university student accommodations being constructed

Apparently, the investment return on such accommodation is very favourable and that is probably a major reason why a developer gets into the student accommodation sector. There is also the fact that the property will hopefully increase in value over a period of time. After all, such companies are quite rightly keen to maximize their profits with such schemes.

When applying for development finance for the construction of new student accommodation that is being purpose built or even for the refurbishment of an existing large property to be made suitable for letting to students, a lender will assess the proposition in the same way that it would any other development finance application.

Some of the major things that the lender will be looking for are evidence that the development loan repayments can be comfortably met by the rental income from the property and that there is a good security margin in place so that, in the unlikely event of having to repossess the property, the asset can be sold quickly to liquidate the debt. Depending upon the terms and conditions of the rental agreement, the lender will be aware that rental income may not be coming in during the student holiday period.

There are numerous lenders that will consider development loans for student-let accommodation. After all, it is perceived to be a reasonably “secure” form of letting as it is highly likely that there will be a steady stream of students wishing to go onto university in the next few years.

So, if you are interested in seeking development finance for accommodation to let to students, why not get in touch with us as we have access to an extensive panel of commercial lenders that may be able to assist.

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