PBSA vs Buy-to-Let – Which Delivers Better Returns?
PBSA vs Buy-to-Let – Which Delivers Better Returns? (A Case Study: Deakin’s Yard vs Portside Place)
Investors looking at the UK property market in 2025 are faced with a choice: traditional Buy-to-Let (BTL) properties or Purpose-Built Student Accommodation (PBSA). Both have their advantages, but which delivers better returns in the current market? Let’s compare two real investment opportunities—Deakin’s Yard (PBSA) in Newcastle-under-Lyme and Portside Place (BTL) in Liverpool—to see how they stack up.
What is PBSA?
Purpose-Built Student Accommodation (PBSA) refers to housing that is specifically designed and built for students, usually located in university towns or cities. These properties are managed by specialist operators and typically include amenities like study areas, social spaces, and all-inclusive rents.
PBSA investments are popular for their hands-off nature, high occupancy rates, and exemption from Stamp Duty Land Tax (SDLT), making them attractive for investors seeking passive income with lower entry costs.
Another benefit? PBSA tends to be less affected by economic downturns. Regardless of what the broader market is doing, students still need a place to live—and their rents are often guaranteed by parents or government-backed loans. That makes the risk of non-payment or overstaying tenants significantly lower than in the traditional rental market.
However, it’s not risk-free. Investors must be careful to choose locations with strong, sought-after universities. If student numbers drop, demand could suffer—especially in areas with oversupply. That’s why city and university selection is critical when investing in PBSA.
What’s the Difference Between PBSA and BTL?
🔹 Buy-to-Let (BTL) – Traditional residential rental properties where investors purchase a home and rent it out to long-term tenants. Typically offers capital appreciation alongside rental income but comes with property management responsibilities and tax considerations.
🔹 Purpose-Built Student Accommodation (PBSA) – Specifically designed for student tenants, often in university towns or cities. PBSA investments typically offer high yields, hands-off management, and full occupancy due to strong student demand.
Now, let’s put them to the test with two standout investment opportunities: Deakin’s Yard (PBSA) vs Portside Place (BTL).
Deakin’s Yard (PBSA) – A High-Yield Student Investment
📍 Location: Newcastle-under-Lyme (Near Keele University & Staffordshire University) 💰 Projected Rental Yield: 8-10% ✅ Hands-off Investment – Fully managed, no landlord involvement required 📈 Strong Student Demand – University towns ensure consistent occupancy 🚫 No Stamp Duty Land Tax (SDLT) – PBSA investments are exempt, reducing upfront costs
Key Benefits:
- Investors receive fixed rental returns.
- No need to deal with tenants, maintenance, or void periods.
- Lower tax burdens compared to traditional BTL investments.
- More resilience during economic downturns.
Potential Risks:
- Less opportunity for capital appreciation than BTL properties.
- Market demand tied to student numbers and university appeal.
- Important to avoid oversupplied or poorly located markets.
Portside Place (BTL) – A Growing Buy-to-Let Opportunity
📍 Location: Liverpool – Regeneration hotspot with strong rental demand 💰 Projected Rental Yield: 6-7% (more with short term lets) ✅ Capital Growth Potential – Liverpool’s property market is rising 🏠 Appeals to a Broad Tenant Base – Young professionals, families, and students ⚠️ Stamp Duty Applies – Investors must factor in the recent SDLT increase
Key Benefits:
- Potential for both rental income and long-term capital growth.
- More flexibility in selling compared to PBSA investments.
- Strong rental demand in a major UK city undergoing regeneration.
Potential Risks:
- Higher upfront costs due to Stamp Duty increases in April 2025.
- Active landlord responsibilities unless managed by a third party.
- Rental void periods possible between tenants.
Side-by-Side Comparison: Deakin’s Yard vs Portside Place
| Feature | Deakin’s Yard (PBSA) | Portside Place (BTL) |
|---|---|---|
Projected Yield |
7-9% |
6-7% (more with short term lets) |
Stamp Duty |
Exempt |
3-6% (higher post-April 2025) |
Management |
Fully managed |
Self-managed or agency fees |
Tenant Demand |
High (students) |
High (young professionals, families) |
Capital Growth |
Lower |
Higher |
Hands-Off? |
✅ Yes |
❌ No (unless using a management service) |
Which Investment is Right for You?
💼 Go for PBSA (Deakin’s Yard) if:
- You want a completely hands-off, high-yield investment.
- You prefer fixed rental returns with minimal involvement.
- Avoiding SDLT is a key priority for you.
- You want a more recession-resilient investment with fewer tenant headaches.
🏡 Go for Buy-to-Let (Portside Place) if:
- You want to balance rental income with long-term capital appreciation.
- You’re open to managing tenants or working with an agency.
- You see Liverpool’s ongoing regeneration as a key growth driver.
Final Thoughts – Why Now?
With Stamp Duty increasing in April 2025, investors need to consider the impact of higher upfront costs on Buy-to-Let investments. PBSA remains SDLT-exempt, making it an attractive alternative for those looking to maximize net returns. However, Liverpool’s strong rental demand and capital growth potential mean Portside Place still offers excellent long-term prospects.
Which strategy fits your investment goals? Contact us today to explore these opportunities before the tax changes take effect! 📩 Get in touch to learn more.
