Securing an interest only loan against occupied student accommodation

Securing an interest only loan against occupied student accommodation

Article by Chris Oatway Co-Chief Executive Officer

What was the situation?

As experts in specialist property finance, we’re no strangers to sourcing funding for property development of all sizes.

Our existing client approached us to secure finance against a student accommodation investment finance deal in the midlands, for a recently completed development of 65 units. The client was looking to hold the asset and had fully let all units.

To do this, they required 70% Loan To Value (LTV) against a £7 million valuation.

The client was cost conscious and despite securing terms, wanted to see if we could beat them and turn the deal around quickly!


What was the issue?

Time was against us due to the tight timeframe surrounding the existing development facility term that was coming to an end.  The client wanted to maximise the monthly net rental income and as such, needed as much of the loan to be on interest only as possible. He also wanted the security of a 5 year fixed rate.


What was the process?

I knew that to source funding, we needed to demonstrate the strengths of the deal. Through creating a comprehensive presentation, I was able to negotiate market leading rates at the leverage required.

We have a long-lasting relationship with the lender so I knew we could rely on them to ensure the case would be managed well, with high levels of communication throughout.


What was the solution?

The client was delighted that we were able to secure a 4.25% fixed rate, with a 1.5% arrangement fee; nearly 90% of the loan as interest only and the rest on capital repayment. We successfully hit the target completion timeframe and as a result, they were highly satisfied with the level of service by both LDN Finance and the lender. Working together as a team, we were proud to secure excellent terms as desired by the client.


Lending solutions with LDN Finance

Do you have a commercial property in need of a new facility? Perhaps you’re restricted by tight timescales?

At LDN Finance, our specialist team has extensive experience in securing short-term finance solutions suited to your circumstances – no matter the complexity. Working closely with our trusted network of private banks and specialist lenders, we’re sure to secure a bespoke arrangement for your project at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.

Need competitive specialist funding?
We can help.

Get your project over the line at market-leading rates with the unrivalled knowledge and network of our development, commercial and bridging finance specialists. Our expert advisers are on hand to find the ideal solution for your next or existing project, no matter the complexity.



Our happy clients

LDN Finance were on the ball, helpful, supportive and nice to deal with. They were brilliant at back channelling with both lender and lawyers. We had tricky development and bridging finance and a short time frame. I would recommend them.

Mr. H

April 2021

LDN Finance are a very professional and helpful company. We have done several deals though Chris and the Specialist team and I would thoroughly recommend them.

Mr. S

August 2021

An extremely professional service, explaining different stages of the bridging refinance process. I was kept informed with regular updates as to progress and requests for additional information. I would recommend with confidence.

Ms. M

August 2021

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