Student housing portfolio secures £4.1m refinance deal
A portfolio of 11 student houses across Coventry and Cardiff has been refinanced with a £4.1m facility from Secure Trust Bank Business Finance, arranged by Mortimer Street Capital.
The five-year deal covers 80 bedrooms let to students at the University of Warwick, Coventry University and Cardiff University, generating approximately £540,000 in annual rental income. All properties hold HMO licences, with several having undergone extensions or loft conversions to increase capacity.
Split-tranche structure
The facility comprises two tranches: £3.1m on a five-year fixed rate and £1m on a variable rate. The structure allows the borrower to benefit from rate certainty on the majority of the debt whilst retaining the option to repay the variable portion early without penalties.
The loan operates on an interest-only basis at 70% loan-to-value against a portfolio valuation of £5.86m. The refinance repays the existing lender and releases equity to the borrower.
The transaction involved complex ownership arrangements, with shares distributed across multiple classes, some held through bare trusts. Existing shareholder loans required subordination to rank behind the bank’s debt. The security package included a share charge, deed of subordination, legal charges over each property, a debenture and an assignment of rental income.
Dovetail acted for the lender, whilst Howells and Brodies represented the borrower.
Hiten Ganatra, chief executive officer of Mortimer Street Capital, said: “This was a portfolio with a lot of moving parts: 11 properties across two cities, a layered ownership structure and a client who needed both certainty and flexibility from their debt.”
Mike Feasey, head of bridging at Secure Trust Bank Business Finance, commented: “Every property investment portfolio has its own requirements and it’s important that the finance is structured to reflect the borrower’s objectives and the assets involved.”
Student accommodation sector
The transaction reflects ongoing investor activity in the student housing sector, which has seen steady demand despite broader rental market shifts affecting void periods. Student accommodation continues to attract portfolio investors seeking income-generating assets with long-term tenant demand.
The deal structure demonstrates lenders’ willingness to accommodate complex ownership arrangements in the evolving property finance market, where bespoke solutions are increasingly required for multi-property portfolios.
