Supporting the growth of a student HMO portfolio

United Trust Bank’s Structured Finance team were approached by Bircroft Private to provide funding for the acquisition and development of a tired property in a popular south coast town to an HMO for student accommodation. The borrower, Rivers Birtwell Ltd, required 100% of the improvement costs with planned works including the addition of bathrooms and a large communal kitchen for the benefit of all the residents.

The Bank had funded a similar scheme for Rivers Birtwell earlier in 2018 and the team were impressed with their professionalism and the quality of their work. On this occasion the borrower wished to acquire the property before change of use to an HMO had been granted but given both the Structured Finance team’s and the borrower’s experience of the sector, the Bank were confident that the application would be successful.

Since drawdown of the acquisition funding the borrowers have secured planning consent for the change of use to a six-bedroom HMO and the Bank and its professional team are working with the borrowers to commence drawdown of the funding for the development works.

Whilst the relationship between property professionals and financial institutions can often be transactional, at United Trust Bank we pride ourselves on developing relationships with customers and providing assistance as they grow their businesses. To this end, our borrowers are continuing to expand their student accommodation portfolio and UTB has now agreed and drawn down a third facility for these successful developers.

Oliver Dorman from Rivers Birtwell commented:
“Our business model requires a funding partner to be fast and uncomplicated when completing loans for new purchases. Gerard took the time to understand our requirements in our first meeting and his team has delivered on his promises, while keeping the process very simple and straight forward”.

Tom Robinson, Director of Bircroft Private, commented:
“We chose to introduce Rivers Birtwell to UTB because we knew that they could deliver on the funding structure required without complicating matters. They delivered a simple and fast funding solution which has led to repeat business and hopefully more to come.”

Gerard Morgan Jackson, Head of UTB’s Structured Finance division added:
“Despite considerable economic and political uncertainty we remain committed to supporting clients who have the skills to spot opportunities and the experience to deliver successful projects. In return our borrowers benefit from dealing with a robust, well-funded lender and a professional structured finance team with a proven track record of providing quick and competitive funding solutions.”

Borrower Property developers specialising in student HMOs
Gross exposure £841,000
Loan Type Structured Finance
Location South Coast
GDV 62%
Project type Acquisition of property and conversion to student HMO
 Special Features · Planning risk – borrower wished to acquire the property prior to change of use permission being obtained

· Light touch approach to monitoring the works given the experience of the borrower

· Building a relationship with the developer funding multiple projects