Student accommodation finance guides
Plain-English answers on buying, developing, funding and refinancing student accommodation, from a specialist arranger.
Straight answers to the questions operators, investors and developers ask before they fund a student accommodation scheme. Written by Matt Lenzie, who has arranged more than £500 million of property and trading-business finance over 25 years. This is finance to acquire, build or refinance student accommodation as a business or investment, not a student loan or help paying rent.
How stabilisation finance works
Stabilisation finance is the debt that carries a finished but not-yet-let property from practical completion through its income ramp to a stabilised income. This guide explains how the facility is structured, sized and repaid.
Read the guide → ProcessDevelopment exit finance vs stabilisation finance
Development exit and stabilisation finance are closely related and often the same facility, but they answer different questions. This guide draws the line between them and shows where they overlap.
Read the guide → DefinitionsWhat is a stabilised asset
A stabilised asset is one whose income has reached its mature, dependable level. This guide defines stabilisation precisely and shows how long the ramp takes across the main sectors.
Read the guide → ProcessHow bridge-to-term refinancing works
Bridge-to-term is the take-out: the move from a short-dated stabilisation bridge onto a long-term investment loan once the asset is stabilised. This guide explains how that refinance works and what it turns on.
Read the guide → DefinitionsDebt yield, DSCR and ICR explained
Debt yield, DSCR and ICR are the three tests a lender runs on an asset's income to decide how much it will lend. This guide explains each, and how they combine to size the loan.
Read the guide → ProcessLoan to value during lease-up
Before an asset stabilises, its income is only part-built, so a lender sizes the leverage carefully. This guide explains which value a lender uses during lease-up and why the loan to value is set where it is.
Read the guide → ProcessHow to fund the lease-up period
A finished asset earns little until it lets, but the debt still costs money every month. This guide explains how the lease-up period is funded and how the interest carry is structured.
Read the guide → DefinitionsDay-one value vs stabilised value
A finished but empty asset is worth less than the same asset fully let. This guide explains the gap between day-one value and stabilised value, how yield capitalisation sets it, and how the income ramp closes it.
Read the guide → ProcessCash-out refinance on a stabilised asset
Once an asset stabilises and revalues, the equity the income ramp created can be released without selling. This guide explains how a cash-out refinance works and what it turns on.
Read the guide → SectorsStabilisation finance by asset class
Every sector reaches a stabilised income, but the ramp looks different in each. This guide shows how the lease-up dynamics, the timeline and the take-out yield differ across the main asset classes.
Read the guide →Got a student accommodation scheme in mind?
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