Is Student Accommodation a Good Investment?

As rental trends evolve, student accommodation stands out — driven by over 2 million UK students and rising demand in university cities.

Strong Demand, Year After Year

Unlike the general rental market, student accommodation benefits from predictable, cyclical demand. Universities continue to attract both domestic and international students, many of whom prefer professionally managed, modern housing. Even in uncertain economic conditions, higher education enrolment often increases — making student housing a relatively recession-resilient asset.

Impressive Yields and Low Voids

In key cities like Manchester, Nottingham, and Sheffield, student properties regularly outperform traditional buy-to-lets in terms of net yield. Purpose-Built Student Accommodation (PBSA) developments, in particular, offer fully managed, hands-off investment options with yields typically ranging from 6–8%. High occupancy rates and guaranteed rental periods also mean fewer voids and more stable income.

With over 2 million students in the UK and international applications on the rise, demand for accommodation remains high (UCAS undergraduate statistics).

Types of Student Accommodation Investment

There are two main routes for investors:

• Purpose-Built Student Accommodation (PBSA): These are modern, often fully managed developments with en-suite rooms or studios, built specifically for student use. Ideal for hands-off investors, they often come with guaranteed yields for the first few years.

• Houses in Multiple Occupation (HMOs): Traditional residential properties rented to three or more unrelated students. HMOs often offer higher gross yields but require active management and compliance with local HMO licensing regulations.

The best choice depends on your strategy — PBSA suits passive investors seeking lower involvement, while HMOs can deliver stronger returns for those willing to take a more hands-on approach.

Student Cities to Watch

Several UK cities are poised for continued growth in student numbers and rental demand:

• Manchester: Home to over 100,000 students and multiple universities, Manchester remains one of the UK’s top-performing student markets with limited PBSA stock.

• Nottingham: With two large universities and a rising international intake, Nottingham offers strong yields and a well-established student rental sector.

• Leeds: A northern powerhouse with a large student base, Leeds is seeing increased private investment and regeneration.

• Sheffield: With a growing student population and relatively low property prices, Sheffield offers attractive entry points for investors.

• Birmingham: The UK's second city is undergoing major infrastructure improvements and continues to attract students both domestically and overseas.

Targeting cities with robust university reputations, ongoing urban development, and constrained housing supply can significantly improve your long-term investment performance.

The Bottom Line

For property investors seeking long-term, income-driven assets, student accommodation presents a compelling case. It combines reliable returns with lower volatility and strong underlying demand — all in a sector supported by one of the UK’s most enduring exports: education.

Interested in student property investment?

At APW Group, we can give you access to pre-vetted developments in high-growth university cities — with expert guidance from sourcing to completion.

Ready to explore accommodations for students? At APW Group, we can give you access to pre-vetted developments in high-growth university cities — with expert guidance from sourcing to completion.

Our team brings over 30 years of experience in property and fixed income investments, guiding you through everything from discovering the perfect property to sourcing lenders.

Looking for your entry point into the student accommodation market? Get in touch today.