UTB entered the market in January with the hire of Andy Thomson (pictured above), in the newly-created role of senior director for operational real estate.

Andy, who is tasked with growing the lender’s presence in the BTR space, explained to Development Finance Today how UTB was seeking to stand aside from the competition.

“We have a special product, for a term up to five years, initially used to finance construction or refurbishment of a property, and then once practical completion is reached the interest rate reduces,” explained Andy.

“There is a further interest rate reduction once the property reaches stabilisation and is fully let. It’s a one-stop-shop loan.”

Here, Andy explained the benefit for developers is they only need to sign one agreement rather than visiting several banks and lenders.

Loan agreements will naturally vary but Andy expects loan sizes to range from £10m to £35m, and rate reductions to generally be around 1.5% in the first instance and then another 50bps in the second.

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While currently as a team of one Andy is busy meeting with developers both in outer London and the regions, the firm has plans to grow the team to five after traction is gained in the market.

Pointing to a positive backdrop of high demand and low supply, Andy is meeting with developers with properties with properties of 100 apartments in the former and around 200 apartments in the latter.

“In terms of the pipeline, I have around 10 [deals] I’m currently looking at the moment, so the pipeline is around the £150m level,” said Andy, who is seeing opportunities in the co-living space as part of this BTR push.

“We are seeing a lot of traction in the co-living market,” added Andy. “These unit sizes are typically quite small, but we like the market because it serves a good area. There is definitely demand for that kind of product - on student accommodation we continue to see that as a very important growth area within the UK.

“We are quite selective in terms of locations, so we tend to focus on the top 50 according to The Sunday Times league table.”