Multiple dwellings relief scrapped by Jeremy Hunt in last month’s Budget

Jeremy Hunt’s decision to abolish tax relief for purchasing multiple dwellings has wiped £67m off the value of a fund and joint venture part-run by student accommodation developer Unite Students.

The chancellor announced the abolition of multiple dwellings relief (MDR) for residential property transactions in England in last month’s spring budget. 

Meridian Square_London

Unite Students’ 41-storey tower in Stratford was approved last month

From 1 June purchases of two or more dwellings worth £250,000 or less will no longer benefit from relief for stamp duty land tax provided under MDR.

The resulting increase in purchasing costs has reduced the value of the UK Student Accommodation Fund (USAF), a £3bn investment fund operated and 28% owned by Unite Students, the UK’s largest student accommodation developer, by £61m.

In a trading update today, Unite said the one-off impact has also taken £6m off the value of London Student Accommodation Joint Venture (LSAV), a partnership between Unite Students and Singapore sovereign wealth fund GIC.

>> See also: Unite Students reveals £1.3bn development pipeline

Unite Students’ wholly owned portfolio has also seen its value reduced by £70m during the first quarter of 2024 as a result of the abolition of MDR, amounting to a 1.3% reduction in asset values.

USAF, which has been disproportionately affected due to the lower average values of properties in its portfolio, comprises nearly 28,000 beds in 71 properties across 19 university towns and cities in the UK.

However, some of the loss of value has been offset by rental growth of 1.7% for USAF and 1.3% for LSAV during the quarter.

Meanwhile, Unite Students has been given the green light for two major new schemes, the 41-storey Meridian Square tower in Stratford, which will contain 952 student beds, and the £73m, 500-bed Freestone Island scheme in Bristol.