Hampshire Trust Bank (HTB)’s specialist mortgages division has entered the Purpose-Built Student Accommodation (PBSA) investment lending market.

It says entry in to the PBSA market stems from the current shortage of student housing across the UK and the experience built by the bank’s development finance team.

The announcement comes off the back of a recent report by Savills, which shows both investors and operators rising demand has resulted in record occupancy for PBSA.

The bank’s entry into PBSA is supported by specialist knowledge of the sector, including the recent hire of senior underwriter, John Laird.

For select transactions where demand is proven, HTB will lend at up to 75% LTV and from 125% gross interest cover ratio.

HTB provides professional investors with specialist residential and semi-commercial loans up to £25m for limited companies, offshore entities, expats, and foreign nationals.

The bank’s managing director of specialist mortgages, Chris Daly, says: “At HTB we have a real appetite for growing our origination capabilities and proposition by examining new ways in which we can help our property investor clients.

“The PBSA market has proved to be much more resilient than other areas of the rental sector, despite being tested during the COVID-19 period, and can provide strong yields for investors.

“Market demand will only increase, with Knight Frank analysis of ONS population projections, along with entry rates from UCAS, suggesting there will be a 16% increase in total full-time undergraduate numbers from now until 2030, resulting in an increase of 263,000 students.

“As a result, we expect interest from larger investors looking to maximise their returns.”