Mortimer Street Capital structures £4.1m split-tranche refinance with Secure Trust Bank for 80-bed student portfolio

05 November 2026

Mortimer Street Capital has arranged a £4.1 million, five-year refinance facility from Secure Trust Bank Business Finance, secured against a portfolio of 11 student houses in Coventry and Cardiff.

The facility repays the borrower’s existing lender and provides a modest equity release. The portfolio comprises 80 bedrooms let to students at the University of Warwick, Coventry University and Cardiff University, and generates rental income of around £540,000 a year. All 11 houses are HMO-licensed, and several have been extended or given loft conversions to increase the number of lettable rooms.

Rather than a single loan, the debt was structured in two tranches: £3.1 million on a five-year fixed rate and £1 million on a variable rate. Split facilities of this kind are not common, but this one gave the client something a single product could not: certainty on the majority of the debt, with the flexibility to pay down the variable tranche early without carrying long-term repayment penalties. The loan was written on an interest-only basis at 70% LTV, against a portfolio valuation of £5.86 million.

The ownership structure made this a demanding transaction. Shares were held across several classes, some through bare trusts, and existing shareholder loans had to be subordinated to the bank. The security package therefore included a share charge and a deed of subordination, alongside legal charges over each property, a debenture and an assignment of rental income.

Dovetail acted for the lender. Howells and Brodies acted for the borrower.

Hiten Ganatra, Chief Executive Officer of Mortimer Street Capital, said:

“This was a portfolio with a lot of moving parts: 11 properties across two cities, a layered ownership structure and a client who needed both certainty and flexibility from their debt. Usually that means compromising on one or the other. By splitting the facility into fixed and variable tranches, we didn’t have to.

“Deals like this are won in the structuring, not just in finding a lender. Secure Trust Bank understood the student housing sector and backed the client from the outset, and credit also goes to Dovetail, Howells and Brodies, who worked through some complex legal issues to get us over the line.”

Mike Feasey, Head of Bridging at Secure Trust Bank Business Finance, added:

“Every property investment portfolio has its own requirements and it’s important that the finance is structured to reflect the borrower’s objectives and the assets involved. In this case, the split-tranche structure provided a balance of certainty and flexibility, allowing the borrower to fix the majority of the debt while retaining the option to repay the remaining tranche early.

“Student accommodation is a sector where understanding the underlying properties, their rental profile and the local student market is important when assessing a transaction. We worked closely with Mortimer Street Capital and the professional teams involved to put a facility in place that met the client’s requirements while providing an appropriate structure for the bank.”