Maximise your revenue and protect your building by diversifying use

The Covid pandemic brought with it significant paradigm shifts within our society. Remote working, online shopping and even ‘Zoom’ gatherings were popularised as we tried to isolate ourselves from others and abide by lockdown rules.

Fast forward to late 2021 and here we are. Still grappling with the ripples of a lockdown culture. For business owners and building managers - particularly PBSA and BTR landlords - this has been particularly challenging.

A great shift has occurred in both the behaviour and mindset of the typical student. Universities have seen multiple course deferrals and a preference towards online courses. Meanwhile, travellers returned home or to a permanent place of residence, leaving countless rooms within BTR and Purpose Building Student Accommodation empty.

Something’s got to give

So how can building operators take this challenge and harness its potential opportunities?

The answer is to apply for a change in ‘Use Classes’. Yes, this can involve some time, practicalities, and legalities, but Staykeepers specialise in supporting their customers to do this with minimal disruption to their long term community.

High volumes of voids are problematic. Not just for landlords, but for the towns and cities in which they are located. Empty assets pose a threat to city dynamics by increasing the risk of anti-social behaviour and segregation. Not to mention of course, the catastrophic impact they can have on building value and investment potential.

In some cases, diversifying your use will require planning permission or prior approval. Notably, we need more flexibility in the buildings Use Classes. What we would like to see is a more efficient use of the real estate with local councils working as the enablers, supporting landlords to vary their occupants to respond to the growing demand for available spaces.

Holding back

But naturally, some building owners are reluctant to do this.

The fear is that long term tenants might end up sharing a kitchen unit with short term travellers who might possess a more careless nature toward the building. There’s also a worry it will create an internal paradigm shift where tenants create their own sharing economy and are less likely to commit to the building.

When partnering with Staykeeprs, we can help you make strategic allocations and provisions that can turn short-term lets into a lucrative and dependable part of your business model. For example, if an operator allocates all of their term time students together, then any void rooms would be grouped together. This means travellers wouldn’t be sharing kitchens or apartments with students, and disparate communities can operate comfortably within the same building both generating income for you.

Societal shifts, big opportunities

With a huge vaccination programme well underway and the relaxation of travel restrictions, 2022 is expected to be the year of the travel boom. Travelling guests will be looking for short term rentals across the globe to accommodate holidays, festivals and weekends away.

By diversifying your building to accommodate short stays, you can capitalise on a new wave of travellers and even essential workers. This will allow you to keep a steady flow of filled beds throughout the academic year and the summer months. Below, we’ve detailed how you can apply for a Non-Material Amendment. This enables you to lawfully accommodate short-lets for a certain period of time in a purpose building student accommodation unit.

How to apply for a Non-Material Amendment

A Non-Material Amendment will allow for non-student occupation between certain dates on a short term let C1 Use basis is required.

The application process consists of the following key components:

  • Prepare a Community Infrastructure Levy (CIL) Form
  • Write a Student Management Plan Addendum. Describe clearly the intent, how the bookings will be managed, how the payments will be handled, arrivals and departures management, additional cleaning and maintenance, security measures, and how would all fit into the current operation and student accommodation management set up.
  • Letter addressing the Case Officer preferably written by Agent Company Director.
  • Local Council Application Form where is described the non-material amendment(s) sought - this case is a Non-Material Amendment to allow for non-student occupation between [start date- end date] on a short term let C1 Use basis.
  • Enclose appropriate architectural plans

The timeline for the decision varies. Once published, the decision will clearly state if a variation to the Section 106 planning agreement that allows for additional non-student occupation on a short term basis up to a certain period of time as per the official application is approved. The variation will not replace the original planning permission.

Help for developers in new schemes

Developers of new PBSA buildings in the construction of buildings in planning have a great opportunity to maximise their asset too. Even though the Use Classes strictly dictate which occupants can be accommodated in a building, if a newly built scheme is unable to fill in the voids in the first year of its operation, then temporary change of use is encouraged in order to enable more opportunities for the asset and the local community and travellers.

Changes within the same Use Class do not require planning permission (sui generis - distinguish). A non-Material Amendment may be required to allow for non-student occupation for a certain period of time, and this should be applied for via the local council.

This transition will be much easier if hospitality items such as toasters, kettles and cutlery are all planned into the early planning. If they’re already set up to accommodate these guests, we can fill voids quickly and efficiently.

Where Staykeepers come in

Where a local council can’t help to support you, Staykeepers can. At Staykeepers, we use smart technology to fill empty residential units. We have experience working with multiple UK and overseas BTR & PBSA Providers and Operators and we have been able to connect travellers - student and non-student - with quality accommodation for short, mid and long-term stays. By accommodating alternative type travellers at an alternative length of stay, Staykeepers has been able to bring additional earnings by filling otherwise empty units for which a landlord would occur cost.

To begin understanding your potential, we have created this handy calculator for our customers to enable you to work out potential revenue.

Previously buzzing student cities such as Leicester, Coventry and Chester were left with hundreds of underutilised units from regular fixed term agreement tenancies. The aftermath of the pandemic could hit building owners from any city, at any time. Becoming open to short term lets and diversity in your tenant pool will protect you from losing revenue and suffering the consequences of high volumes of voids. Flexibility is, and always will be, key.

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