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  • Sector high yields
  • 10-year fixed income periods
  • Fully managed – every detail, every day
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Beginner's guide to UK property investing
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Frequently Asked Questions

Buy-to-Let v Purpose Built Student Accommodation

Why is Stamp Duty lower with Purpose Built Student Accommodation?
The government responded to the UK’s growing housing shortage by increasing stamp duty on buy to let properties. The 2016 Budget lowered Stamp Duty responsibilities for non-residential property, a category that includes Purpose Built Student Accommodation.
Why is PBSA a more hands-off form of investment?
PBSA benefits from management companies that operate out of offices onsite around the clock. They handle all marketing, maintenance and housekeeping, enabling buyers to simply sit back and wait for their returns to arrive each quarter.
Why are maintenance costs lower with PBSA?
PBSA owners have a NET income with no additional costs for 10 years. The large size of developments means that management companies use economies of scale to buy replacement furniture, fixtures and fittings in bulk, driving down costs.
Why are PBSA returns higher?
PBSA benefits from higher rental and occupancy levels, at a national average of 99% (CBRE data). The large number of rooms in PBSA developments enables the management to capitalise on economies of scale to drive down start-up and running costs.
What’s the difference between BTL and PBSA?
Buy-to-Let properties tend to be residential home conversions and are legally classified as Homes in Multiple Occupancy (HMO). PBSA tend to be large, apartment block developments with round the clock onsite management and an excellent range of modern facilities.

10-year fixed income periods

What happens after 10 years?
Buyers retain full ownership of the property. They can choose to sell it, renegotiate terms with the developer or manage their unit independently of the wider development.
Why is it better to have a longer fixed income term?
Unlike shorter income periods, a developer cannot artificially inflate the purchase price to cover the outlay of returns. A 10-year fixed income period is evidence that the buyer is paying a competitive price for the property, and that the buyer’s interests are aligned with the developer.
What tax am I responsible for?
Buyers have Stamp Duty responsibilities only if they buy single or multiple units valued at £150k or more. They are also responsible for annual income tax payments, with the exact amount dependent on UK self-assessment regulations.
What costs do I have to pay during the fixed income period?
None whatsoever.
What is my relationship with the developer?
A 10-year fixed income period is evidence that your interests are the same as the developers’, who are ultimately responsible for the delivery of yields. They work to ensure the property’s profitability from purchase through to resale.
What happens to the fixed income period at resale?
The remainder of the term is transferable at resale. A 10-year fixed income period allows you to offer attractive returns to a new buyer for a property with proven performance levels, while profiting from strong capital growth.

Purchase

Why can’t I get finance for PBSA?
Banks do not provide finance for Purpose Built Student Accommodation because of the small size of the units and their lack of private social spaces. They also lack the control they normally seek from an investment – since it is tied to the developer, the management company and, separately, to the tenant.
How and when do I receive my returns?
While this may vary slightly from property to property, funds are generally paid into the buyer’s bank account each quarter in arrears - in the case of the Westbeach Serviced Apartments, for example, payments are biannual. This is an automatic payment, so once you have provided your bank details, you simply need to wait for the money to arrive.
What after-sales care do you provide?
Any purchase of a new build property will be followed by regular construction updates and site photography. All our buyers also receive updates on market shifts relevant to our properties. We have a dedicated after-sales team who will answer all your queries and liaise with the solicitors every step of the way to ensure a prompt, stress-free exchange.
Our legal partners offer comprehensive advice. They are one of the UK's largest commercial property firms and a member of the UK Law Society. Clients are provided with an experienced property lawyer, available at a fixed, capped rate.
Is it possible to visit the site?
Site visits can be arranged throughout the year but need to be organised in advance. The developer and property agents will be available to answer any questions you may have, along with the management team in operational properties.
Will I own the property?
You own the property with a 125 to 250-year leasehold ownership agreement, registered at the Land Registry.

Developer

How does the developer make a profit?
The developer makes a profit from rental increases during the fixed income period, and from the management company’s ability to sustain occupancy levels and drive down running costs (which remain efficient during the 10-year term because of the large economies of scales that they operate under).
What experience does the developer have?
Beyond their experience in the residential property market, which dates back to 2001, our partner developer entered into their current focus sectors about half a decade ago. They are the UK’s only NHBC certified student property developer, and have so far brought 17 student properties and one large serviced apartments development onto the market. They have completed on schedule each and every time, but more importantly have delivered the agreed yields– read more
How can I trust the developer?
The same way we do. Our developer is a Top 400 residential build company which has won a national NHBC award for build quality. All its new build properties are protected by an independent 10-year RICS structural warranty.

Management

How do I know they’ll manage the property effectively?
The interests of the management company are exactly the same as yours; they are incentivised to ensure 100% occupancy and to nurture rental growth for the developer.
What experience do Mezzino have?
Established in 2010, Mezzino manage over 1,900 student rooms across the UK and are responsible for the collection of over £9m in rent from a property portfolio with a total value of over £80m. They are also recognised by Accreditation Network UK.
Who manages the property?
The developer is ultimately responsible for management, and they install a specialist company to handle this on their behalf. This company works under a performance-based contract and can be replaced at any time if they fall short of expectations. The current management company is Mezzino.

Resale

Will Emerging Property help with resale?
We will be happy to advise you on a suitable valuation in order to maximise profit and attract a new buyer. We have a large database of active buyers from around the world, and usually aim to resell a property within 4-6 weeks.
How much will my property be worth at resale?
You can set the value of your property at resale. The value of commercial property is based on its ability to generate income for the buyer. The high NET yields allow the buyer to offer attractive terms at resale alongside strong capital growth levels.
What are my chances of selling for a profit?
Properties in the UK generally double in value every 10 years. The chances of making a profit with commercial property are even better, however, as their value is based on inbuilt yield-driven capital growth.
What is the health of the student property resale market?
According to Savills UK Student Housing Report 2016, 80% of total trading involved operational properties, with a total value of £4.75 billion. This shows the level of demand for properties with proven income generation and performance levels.
Will my property be attractive at resale?
New buyers will be attracted to a low-risk property with proven performance. Our high yields and sector-leading long fixed income periods ensure you will be able to offer more favourable terms than those which can be expected from many off-plan developments on the market today.
When can I resell my property?
Buyers can resell their property at any point during the fixed income period, from exchange of contracts to 10 years later when it ends.

Have a question? Ask the team...

12 Comments
  • Default Avatar

    Andrew Hutchins - 10/02/2017

    How much ground rent/maintenance per year is charged on average…does this go up with inflation ?

    Reply
    • Emerging Property Avatar

      from Emerging Property - 10/02/2017

      Moderator

      Good afternoon Andrew, thanks for getting in touch – our property investors have zero costs throughout the 10-year fixed income period. This means no yearly ground rent, no maintenance fees and no service charge. You will also not be charged for furniture replacement, repairs or management costs – it does exactly what it says on the tin, what you read in our Investor Reports is what you get. I have passed your email address on to one of our senior sales consultants who will be in contact to explain this in more detail.

  • Default Avatar

    Sue Wright - 06/02/2017

    Hi, I’m interested in purchasing a property in Loughborough, please can you let me have relevant details. Thank you

    Reply
    • Emerging Property Avatar

      from Emerging Property - 07/02/2017

      Moderator

      Thanks for getting in contact Sue – we have two large Purpose Built Student Accommodation developments in Loughborough, as well as many others in undersupplied university cities across the UK. We regularly have resale opportunities that provide high NET yields and long fixed income periods. You can also see evidence of their performance levels and income history. I have passed your email address to one of our senior consultants who will be in touch soon.

  • Default Avatar

    George Woods - 20/01/2017

    any current investors from New Zealand?

    Reply
    • Emerging Property Avatar

      from Emerging Property - 24/01/2017

      Moderator

      Yes George, we have clients in New Zealand and 70 other countries around the world – since our properties are fully managed, they are perfect for remote ownership. All aspects of the purchase and legal title are identical for overseas buyers and UK residents – tax will be based on New Zealand regulations. One of our senior consultants will be in touch soon to answer your questions in more detail.

  • Default Avatar

    allan sanders - 09/01/2017

    do you have a uk telephone number?

    Reply
    • Emerging Property Avatar

      from Emerging Property - 24/01/2017

      Moderator

      Hi Allan, you can call our UK office on +44 203 287 8727. I have also passed your email address to one of our senior property consultants, who will be in contact soon.

  • Default Avatar

    stephen - 18/12/2016

    Thank you. One area I would like to know about the property is completion date. Have the property been built or off plan projects. If off plan, when will it be completed? do I get profit during the building stage or after completion of construction work. Kindly clarify me on these points. Thank you again.

    Reply
    • Emerging Property Avatar

      from Emerging Property - 24/01/2017

      Moderator

      Thanks for getting in touch, Stephen – we have both off-plan developments and fully operational properties, with all providing the option for immediate income. In the Investor Report for each new build property, you will receive comprehensive details of the construction timeline and operational date – your payments are staggered across key stages of construction and only processed upon architectural sign-off. One of our senior consultants will be in touch soon to answer your questions in more detail.

  • Default Avatar

    Michael Brown - 17/12/2016

    Is it possible to purchase these properties via a Ltd Company? What is the average fees for the purchase of a property?

    Reply
    • Emerging Property Avatar

      from Emerging Property - 24/01/2017

      Moderator

      That’s a good question Michael – yes you can purchase one of our property investments through a limited company, and this a common approach for many of our clients. Beyond the property price, the only additional money you will be charged by us is a one-off legal fee, which is fixed from the outset but varies from project to project and is specified in each Investor Report. One of our senior consultants will be in touch soon to explain this in more detail.

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