The situation
Standard BTL lenders often decline student stock or downvalue significantly. Specialist student lenders underwrite on lettings covenant (nomination agreement, private lets, university partnership) and manage seasonality appropriately.
How we approach it
We route student deals to lenders that actively want them. PBSA blocks, purpose-built HMOs and traditional student HMOs each have a distinct panel — knowing which is the value-add.
What that looks like in practice
- PBSA typically funded at 60-70% LTV, sometimes higher with covenant
- Student HMOs at 70-75% LTV on rental yield
- Nomination agreements (university partnership) materially improve pricing
- Void periods (summer) modelled appropriately, not assumed at full-year rate
- Change-of-use routes for houses becoming student HMOs
Typical timeline
- Weeks 1-2Property and tenancy structure assessed, specialist lender shortlist.
- Weeks 3-6Application, valuation, credit.
- Weeks 6-10Legals, completion.
Common questions
PBSA vs student HMO — which is easier to fund?
Depends on scale. Small (3-6 bed) student HMO uses the specialist HMO panel; PBSA blocks use commercial lenders. Both financeable, different routes.
How are void periods treated?
Realistic view: 10-12 months annual occupancy in most university towns. Lenders that know the sector price accordingly.
What about Article 4 areas?
In A4 areas, new HMO conversions need planning — funding available but timeline extends. Existing licensed HMOs unaffected.
Send the property and lettings structure
We'll route to specialist student lenders — a small, well-defined market we know well.