Student Accommodation Development Finance

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Shawbrook's Student Accommodation Development Finance provides specialised funding solutions for the construction or conversion of student housing.

Why Shawbrook?

Shawbrook's Student Accommodation Development Finance offers funding solutions for the construction or conversion of student housing. Funding is available in all university locations, including non-Russell Group and Red Brick. We have a strong regional presence and can provide flexible refinancing options upon project completion, supporting developers with every stage of their development project.

Any property or asset used as security may be at risk if you do not repay any debt secured on it. Our development finance is not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

Student Accommodation Development Finance

Loans size £1m - £30m
Maximum gearing 65% Loan to Gross Development Value (LTGDV)
Maximum 85% loan to cost
Cash/equity contribution to be injected ahead of any Bank funding
Development Lender of the Year - NACFB Awards 2021, 2022 & 2024

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What is Student Accommodation Development Finance?

Student Accommodation Development Finance provides developers with essential funding for the construction or conversion of properties designated for student housing.

This financing typically offers bespoke financial packages that address various stages of development, including land acquisition and construction expenses.

Student Accommodation Development Finance ensures that the properties align with the specific needs of student tenants, including amenities such as study areas, high-speed internet, and communal spaces.

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Who is Student Accommodation Development Finance For?

Student Accommodation Development Finance is designed for property developers and investors aiming to build or convert properties into student housing.

This finance option caters specifically to those focusing on creating accommodations that meet the unique needs of student tenants and provides essential amenities for student life.

Lending criteria for Student Accommodation Development Finance

Shawbrook assesses several criteria for Student Accommodation Development Finance, including the developer's experience, the project's feasibility, and location suitability.

We also evaluate the financial stability and creditworthiness of the developer, as well as the projected return on investment.

Detailed plans, regulatory compliance, and potential rental income are critical factors. Adequate insurance coverage and a sound exit strategy are also necessary to secure financing

Benefits of Student Accommodation Development Finance

Student Accommodation Development Finance offers several benefits, including tailored financing solutions that meet specific project needs, potentially lower interest rates due to perceived stability of the student rental market, and access to specialised lenders with industry expertise – like Shawbrook.

Additionally, Student Accommodation Development Finance can enhance cash flow management by covering construction costs and providing flexible repayment schedules aligned with rental income streams. This finance also supports scalability, allowing developers to expand their portfolios strategically.

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Factors to consider when securing funding

When securing funding for Student Accommodation Development Finance, consider these key factors:

Location: Assess the proximity to universities, public transport, and local amenities.
Number of Beds: Evaluate the housing capacity to meet student demand.
Rental Agreements: Determine whether a nomination agreement or direct let arrangement will be entered into.
Facilities Management Costs: Consider ongoing operational and maintenance expenses.
Rental Duration: Plan for the typical number of weeks in the rental period.

Costs and Fees

Developers may face various costs and fees with Student Accommodation Development Finance, including:

Loan Arrangement Fees: Charges incurred for setting up the loan, usually a percentage of the loan amount. Charged upon completion of project.
Valuation and Legal Fees: Costs for assessing the property's worth and legal work to finalise the financing agreement.
Monitoring Fees: Charges for ongoing project oversight to ensure proper progress.
Interest Charges: The cost of borrowing the loan amount, accruing over time.
Insurance Premiums: Costs for securing adequate insurance coverage for the project.
Contingency Funds: Budgeted amounts to cover unexpected expenses during development.

What types of projects can be funded?

Student Accommodation Development Finance can fund various projects, including new student housing construction, refurbishment of existing properties, conversion of buildings into student residences, and expansion of current facilities. Additionally, mixed-use developments that include student accommodation alongside retail or communal spaces can also be financed.

Can I refinance?

Yes, you can refinance Student Accommodation Development Finance. Refinancing allows you to replace your existing loan with a new one, typically with better terms. This can help reduce monthly payments, secure a lower interest rate, or extend the loan term. Lenders typically assess the current value of the property, your creditworthiness, and the project's financial performance before approving a refinance.

How to apply for Funding

To secure funding for a Student Accommodation Development Finance project, follow these straightforward steps:

Submit Enquiry: Contact Shawbrook to discuss your project and funding needs. Indicative terms provided at this stage.
Application Form: Complete and submit the application form with the required details.
Documentation: Provide supporting documents such as project plans, financial appraisal, and details of previous experience.
Assessment: Shawbrook will review your application and conduct due diligence. Including site visit.
Offer: If approved, you'll receive a formal offer outlining terms and conditions.
Acceptance: Sign and return the offer to accept the financing terms.
Completion process: Formal valuation and monitoring surveyor reports and legal due diligence undertaken.
Drawdown: Access funds as your project progresses, paying interest only on the amount used – funds are paid out in arrears against evidenced work on site.

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