Student Property Mortgages

If you’re thinking about investing in student accommodation, you’ll need to get the right type of finance. A student property mortgage can make this possible, but the eligibility criteria differ from standard rental properties.

Here, we’ll explain how student property mortgages work, which lenders offer them, and whether it’s a good investment.

Can you get a mortgage to buy a student property?

Yes, you can, but most student lets are classed as a specialist type of buy-to-let property. Because of higher tenant turnover and potential wear and tear, not all lenders are comfortable offering a mortgage on student property.

If you plan to rent to students, you’ll typically need a specific buy-to-let mortgage for student properties or, if there are multiple tenants, a House in Multiple Occupation (HMO) mortgage. In most cases, you’ll also need to demonstrate that the property meets local licensing and safety regulations.

What kind of mortgage do you need?

The right mortgage depends on the type of student property you’re buying and how it will be managed.

Buy-to-let mortgage

This is the most common option for smaller student homes, such as standard two or three-bedroom properties rented to individual students on separate tenancy agreements.

Lenders may impose limits on the number of occupants or require an assured shorthold tenancy (AST) for each tenant.

HMO mortgage

If the property will house five or more unrelated students sharing kitchen and bathroom facilities, it’s classed as an HMO (House in Multiple Occupation).

You’ll need an HMO licence from your local council and a specialist HMO mortgage, as the setup involves more regulation and risk from the lender’s perspective.

Portfolio mortgage

If you already own multiple student properties or are building a portfolio, a portfolio mortgage allows you to finance several student lets under one borrowing arrangement. This can simplify management and possibly lead to better rates for your property portfolio.

Commercial mortgage

If you’re investing in a large student development or purpose-built accommodation block, you’ll need a commercial mortgage.

These are assessed based on the rental yield and long-term income potential, rather than your personal income alone. You’d need a specialist commercial mortgage lender, and loans are often created on a bespoke basis, tailored to your needs.

Lending criteria for student properties

When assessing your application for a student property mortgage, lenders will look at several key areas:

• Property type and location: Lenders prefer student properties near established universities or colleges, with strong rental demand and good transport links. Properties in designated student areas often perform best as rentals.

• Rental yield: Expected rental income must comfortably cover the mortgage payments, typically by at least 125% to 145% of the monthly interest payments (known as the rental coverage ratio). Some lenders may require higher yields for HMOs.

• Landlord experience: First-time landlords can still qualify, but certain lenders may prefer applicants with previous experience, particularly when managing HMOs or multiple tenants.

• Licensing and compliance: For HMO student properties, you’ll need to hold a valid HMO licence and ensure the property meets current safety and fire regulations. Evidence of compliance is usually required before mortgage approval.

• Deposit and loan-to-value (LTV): Deposits are generally higher than for standard homes; most lenders require at least 25% of the property value, and sometimes 30% or more for HMOs.

• Tenancy structure: Lenders will check that your tenancy agreements comply with UK rental law. Joint tenancies, or separate ASTs per room, must align with their specific lending policy.

How to get a student property mortgage

Getting a mortgage on a student property can be more complex than applying for a standard buy-to-let, but preparation and the right advice can make a big difference.

Here’s how to improve your chances of approval:

1. Work with a specialist broker: Not all lenders advertise or accept student lets directly. A specialist broker can connect you with lenders comfortable with HMO or student buy-to-let mortgages and prevent any unnecessary rejections.

2. Prepare your documents: You’ll need proof of income, ID, property details, and projected rental income. For HMOs, include your licence, floor plans, and compliance certificates.

3. Research local regulations: Student lets often fall under additional local housing rules, so ensure you understand your council’s HMO or selective licensing requirements.

4. Show a strong business case: Lenders want to see that your investment is sustainable. Demonstrate consistent demand for student housing in your area and evidence that the rent easily covers mortgage repayments.

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Is student housing a good investment?

Student property can be a solid investment when managed well, but it isn’t without challenges. Here are some pros and cons to consider first:

Pros

• Consistent demand in university towns and cities

• Typically, high rental yields, particularly for HMOs

• Shorter void periods during term time

• Flexible property use (perhaps switching to rent to professionals or families)

• Potential for strong long-term capital growth in established student areas

Cons

• Difficult to arrange without expert support

• Higher wear and tear from short-term tenants

• More management responsibility, especially for HMOs

• Stricter local licensing and safety rules

• Limited mortgage options compared to standard buy-to-lets

Overall, if you buy in the right location and work with an experienced mortgage broker, student housing can offer steady returns and long-term growth potential.

Why choose Money Helpdesk for your student property mortgage?

We specialise in helping landlords and investors secure mortgages for student properties across the UK. Whether you’re purchasing your first student house or expanding an existing portfolio, our brokers know which lenders are open to student lets and how to secure the best possible deal.

Because our brokers understand the complexities of HMOs and student property lending, they know how to present your case to lenders for the highest chance of approval.

Here’s why people across the UK choose Money Helpdesk to help arrange their student property mortgage:

• Access to UK brokers who specialise in student mortgages

• Free initial chat with no obligation to proceed further

• Our advisors have 5-star ratings on leading review platforms

• Introductions to lenders offering tailored student property finance

If you’d like to compare rates or speak with a broker who specialises in student property mortgages, you can get started here.