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Discover why serviced apartments are the new buy-to-let
  • 8-12% NET annual yields
  • 10-year fixed income agreements
  • Professional onsite management
  • Full legal ownership
  • Zero costs for 10 years
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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 Alpha Student Management have?
 
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 Alpha Student Management.

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.

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