A client approached Enness seeking to refinance a portfolio of student accommodation properties and release additional equity to support further development projects. The family-owned property business specialised in student accommodation and had an established portfolio of assets.
The existing lender was prepared to provide borrowing up to 60% loan-to-value (LTV), but the client wanted to raise additional capital to continue expanding the portfolio. Three properties in Portsmouth were available as security, with a combined value of approximately £2.5 million.
The transaction required a flexible approach because the client planned to sell one of the existing properties within the following six months while also adding another student accommodation asset once construction was complete and the property became operational.
A conventional refinance could have made these plans more difficult, as the proposed sale and acquisition would change the composition of the secured portfolio. The client therefore required a lender willing to consider the existing assets alongside the wider development strategy.
OUR SOLUTION
Enness identified a specialist commercial lender able to assess the portfolio as a whole and take the client’s future plans into account. The lender was willing to provide a higher level of gearing and structure the borrowing so that one property could be replaced by another within the wider portfolio, subject to the agreed terms.
A first charge was taken over the three existing student accommodation properties, with a gross facility of approximately £1.75 million arranged over a 10-year term on an interest-only basis. The structure provided additional capital while retaining flexibility around the future composition of the portfolio.
This allowed the client to pursue their planned disposal and continue developing the wider student accommodation business without requiring a complete restructuring of the finance each time the portfolio changed.
The case demonstrates how bespoke commercial refinancing can provide greater flexibility for property investors whose portfolios are evolving. Where assets are being sold, developed or replaced, specialist lenders may be able to structure facilities around the broader investment strategy rather than treating each property in isolation.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
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Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
