PBSA (Purpose Built Student Accommodation) With Residential Estates Michael Holliday | Investments Manager
Michael Johns| Senior Investment Consultant Andrew Brassey | Business Development Manager
www.residential-estates.co.uk 01244 34 33 55
MICHAEL JOHNS Senior Investment Consultant
ANDREW BRASSEY
Business Development Manager
M I C H A E L H O L L I D AY Investments Manager
Topics of Discussion • • • • • • •
What is PBSA? Covid & PBSA Pros & Cons Stamp Duty with Shane Mockler Exit Strategy Where to Buy PBSA? The Villas, Stoke On Trent
Student Accommodation University Halls of Residence
Te r r a c e d H o u s e s & H M O ’ s
PBSA Student Accommodation
Images from shared student houses
2 x Current Halls of Residence – Keele University
What is PBSA? PBSA is accommodation built specifically by private developers for students, usually private studio
apartments,
with
attached
leisure
facilities including cinemas, gyms, and games rooms.
COVID-19 & PBSA • Wellbeing • Own Space • Support
Cluster apartments have struggled during the pandemic due to shared kitchens and bathrooms
Pros & Cons
• Strong Demand • No Finance Available – Cash Only • Fully Managed Hands Free Option • UK Wide Static Rental Figures • High Returning Guaranteed NET Yields • Low Capital Appreciation • No Stamp Duty upto £125,000
Shane Mockler Head of New Business SDLT Cap Ex Associates Tax Ltd “we’re more than just a group of tax specialists.”
https://www.capextax.com/
Stamp Duty Land Tax Student Accommodation Relief
Introduction Over the past few years, Student Accommodation has become increasingly popular amongst Investors. As well as a committed 12 month tenancy, high yields and a council tax exemption, one reason for this is because Student Landlords can qualify for Stamp Duty Land Tax relief where the Higher Rates for Additional Dwellings are exempt. There are three areas in which Student Accommodation is categorised by HMRC.
https://www.capextax.com/
Category One Student Halls of Residence owned or managed by the educational institutions are for SDLT purchases, not capable of being a dwelling. Due to this, they are outside the scope for HRAD and MDR. They will be charged to the Non-Residential Rates of Stamp Duty.
https://www.capextax.com/
Category Two Student Accommodation other than Halls of Residence owned by private landlords for the sole benefit of students are charged to the Residential Rates of Stamp Duty but exempt from HRAD. There will need to be two key pieces of evidence. 1) To justify that letting is solely for the benefit of Students. 2) That the dwelling was operating as Student Accommodation by the effective date Multiple Dwelling Relief is available if applicable.
https://www.capextax.com/
Category Three Student Accommodation other than Halls of Residence that is not restricted to students will be charged the same as any other Residential property acquisition.
MDR and HRAD may apply.
https://www.capextax.com/
To Speak with CapEx Associates Tax Ltd head to our tools & resources pages CapEx Associates (residential-estates.co.uk) LINK IN CHAT
Re-Sales & Exit Strategy
ORME HOUSE • Studio 3rd Floor • Purchase Price: £65k • Completed 2019 • NET Yield 8.64% • Tenanted
KEELE HOUSE • Studio 1st Floor • Purchase Price: £55k • Completed 2017 • NET Yield 7.10% • Tenanted
X1 CHAPEL STREET • Studio Ground Floor • Purchase Price: £55k • Completed 2013 • NET Yield 6.25% • Tenanted
Where to buy
Secondary towns/cities have: • • • •
Less competition Higher demand Lower property prices Higher Yields
Top Tips to Buying PBSA Look for larger Universities S e c o n d a r y To w n s / C i t i e s Communal facilities – Gym, Cinema Car Parking Fully enclosed Studio apar tment Established Management company
The Villas Stoke-on-Trent
Developer: Abode
£74,950 Prices starting from
Student Studio Apartments Luxury PBSA development located in high demand area Fully furnished with contemporary. luxury interiors incl. 40-inch SMART TV’s State of the art facilities including leisure suite, cinema room & gym Supporting 2 universities, with a huge shortage of student accommodation
4% interest on deposited funds Assured 8.5% NET yields for 3 years, excluding ground rent
Thankyou for watching! If you would like more information on working with Residential Estates and our available developments, please follow the link in the chat bar. Contact Us Directly 01244 34 33 55 sales@residential-estates.co.uk www.residential-estates.co.uk