This was revealed by Unite Students’ update on current trading and quarterly property valuations for the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV) as of 31st March 2024.

Unite said that its property values were stable in Q1 (USAF: (0.5%), LSAV 0.8%) with rental growth offsetting the loss of MDR.

As part of the Spring Budget, the government announced the abolition of MDR for residential property transactions in England with effect from 1st June.

MDR provided relief for stamp duty land tax when purchasing two or more dwellings valued at £250,000 or less, which benefitted several of the group’s properties.

Unite’s independent valuers have fully reflected the increase in purchasers’ costs in the 31st March fund valuations, which has resulted in a £61m (2.0%) and £6m (0.3%) reduction in value for USAF and LSAV respectively.

USAF is more significantly impacted due to the lower average value of dwellings (cluster flats or studios) for its portfolio.

•   The Finance Professional Show 2023: The Video
•   Redrow exchanges contracts with Homes England for new resi development
•   Unite Students to build £75m PBSA in Bristol

However, demand for the group’s accommodation remains strong, with good progress in sales since its preliminary results.

Across the group’s portfolio, 86% of rooms are now reserved for the 2024/25 academic year, ahead of its typical leasing pace and slightly below the record reservation rates last year (2023/24: 90%).

Demand from universities continues to grow with a further 1,000 beds secured via nomination agreements since Unite’s preliminary results.

Joe Lister, Unite’s CEO, commented: “Student demand is strong for the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer and a growing shortage of high-quality student homes. 

“Together with our alignment to the UK’s strongest universities, this supports a positive outlook for rental growth for the 2024/25 academic year and underpins our property valuations.

“Our balanced approach to rental growth will ensure sustainable returns over the long term, while also remaining good value for students.”