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Buy To Let and HMO

Unlock the potential in Purpose Built Student Accommodation

  • Demand for PBSA is only likely to increase
  • Investment in the sector hit a record £7.2bn in 2022
  • InterBay arranged £24.9m in commercial refinance and development loans for Kexgill

Purpose Built Student Accommodation (PBSA) is a far cry from the dingy college digs many of us remember. More and more students are turning away from dated house shares and old-fashioned university halls of residence towards PBSA units which have more to offer today’s discerning consumer.

PBSA offers a range of options, from studio flats to clusters of six or seven en-suite bedrooms sharing a variety of living spaces. Those spaces may provide cable TV, gym facilities, cinema rooms, relaxation lounges and laundry facilities. Many are positioned in central locations, come with top-quality Wi-Fi and offer all-inclusive rents. The pandemic may have helped increase demand for PBSA, with more students seeking their own en-suite bathrooms for hygiene reasons, super-fast broadband for online learning and more communal spaces to combat loneliness.

International students are also attracted to PBSA, as it gives them the security of booking their accommodation online and knowing in advance exactly what they’re getting, rather than having to trawl around student houses on arrival.

Demand for PBSA is only likely to increase given the forecasts for strong growth in student numbers.

The number of UK undergraduates starting degrees has reached record highs of over 600,000 every year since 2020. Volumes are predicted to rise further over the next five to 10 years due to a demographic bulge in the number of 18-year-olds, plus a challenging economy encouraging young adults to upskill. Higher Education think tank HEPI calculates that the total number of university places required in England, Scotland and Northern Ireland will have risen by 358,000 between 2020 and 2035.

International student numbers are also predicted to increase, building on record figures in 2022/2023, when one in every 10 undergraduates in the UK came from outside the EU.

All told, it’s little wonder property investors are eyeing the PBSA sector with interest. In fact, investment in the sector hit a record £7.2bn in 2022, an increase of 69% on the previous year, and markedly higher than the previous long-term five-year average of £4.1bn a year, according to Knight Frank. Rising interest rates, soaring inflation and escalating labour and material costs did cause the market to dip in Q1 2023, but Q2 rebounded to see investment of £1.1bn in the PBSA.

Potential returns are very attractive, but the sector is relatively new and can be challenging to navigate. So it’s essential that brokers and their PBSA clients work in partnership with an experienced lender who knows this market and can make the experience as frictionless as possible.

At InterBay we have significant expertise in the PBSA sector, having worked closely with some of the UK’s largest providers of student accommodation, such as KexGill Group.

Earlier this year, InterBay arranged £24.9m in commercial refinance and development loans for Kexgill. Of that, £20m was a 10-year facility fixed for five years, interest-only commercial investment refinance of 350 student bedrooms, all previously mortgaged with InterBay, located in Bradford, Hull, Liverpool, Middlesbrough, Nottingham and Preston. All of the properties are student accommodation that has been finished to a high standard, including a number in the prestigious PBSA University Quarters neighbouring Hull and Nottingham Trent universities developed by Kexgill.

As any broker knows, the bigger the deal, the greater the potential stress for the borrower. However, the Kexgill team were reassured by the process all larger cases go through with the assistance of OSB Group’s High Net Worth Team and approval by the Bank’s internal Transactional Credit Committee which reviews every application worth more than £2m. If the TCC agrees a case, it provides confidence and comfort to the broker and their client that InterBay will support the application.

Presentation to TCC takes place before a valuation is instructed to agree a decision in principle, potentially saving substantial amounts of money, particularly in a deal of this size.

Revaluing a portfolio as large as this Kexgill student investment inevitably posed a challenge due to the sheer volume of units involved. However, the InterBay Real Estate team enjoys a close relationship with its panel of valuers. Working collectively with the panel, the client, the solicitors and broker, the team was able to complete the deal smoothly.

This joined-up approach makes all the difference when it comes to the sort of large-scale cases currently typical in the PBSA sector. But market knowledge and experience are also key. As increasing numbers of smaller investors are drawn to PBSA, alongside the typical larger developers and institutional investors, brokers should carefully check lenders’ credentials when it comes to expertise, and the quality of service that they can offer.

If you want to find out more about the ways InterBay can support PBSA cases, speak to our national Specialist Finance Team.

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Davey Gurm

Specialist Finance Account Manager
Areas covered

London and Greater London


I joined the team as a specialist finance account manager in 2021 after holding similar roles at a number of other financial services companies. I enjoy interacting with brokers and am dedicated to supporting our ongoing commitment to strengthen relationships with all of our intermediary partners.


Kevin Beale

Specialist Finance Account Manager
Areas covered



I joined the company more than seven years ago, initially as national sales manager, then as new build distribution manager, before moving over to my current role. I love working closely with my broker partners and helping them to access products that their clients might struggle to get on the high street.

Mo Parmer (1)

Mohinder Parmar

Specialist Finance Account Manager
Areas covered

London and South East


I joined the group in 2022 after more than 20 years of experience working in banking, first as a private banker then as a relationship manager looking after my broker partners. The thing I love especially about specialist lending is that every case I receive is different with its own set of challenges, so when I’m able to finally get it over the line it gives me a real sense of achievement. I’m really looking to helping you with your complex cases and showing off our exciting proposition.


Charlotte Parker

Specialist Finance Account Manager
Areas covered

South West


I’ve been supporting brokers in South West ever since joining the company in April 2019. With nearly 20 years of experience working in financial services, I’ve developed a detailed knowledge of the mortgage market which means I’m perfectly placed to help you with your cases. Whatever support you need, I’m here to provide solutions to complex cases, and diffuse and resolve any issues that may arise during the processing of an application.

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This information is for mortgage professionals only and not intended for use by the general public. All rates, programmes and pricing are subject to change at any time and without prior notice. Mortgages are subject to valuation and approval.