The UK student housing market is gaining strong momentum. In Q2 2025 alone, investors poured in £830 million, signalling renewed confidence after recent years of uncertainty.
Projections forecast the sector will grow by around 5.6% annually through to 2030, with revenues increasing from roughly £1 billion today to almost £1.4 billion by the decade’s end.
This growth is driven in large part by a persistent supply-demand imbalance. Prime Purpose-Built Student Accommodation (PBSA) continues to report occupancy rates above 97%, while the country is projected to face a national shortfall of over 620,000 student beds by 2026.
These tight market conditions are pushing rental growth sharply higher, with some northern cities experiencing annual rental increases between 10% and 12%.
BIGGER PICTURE
Student housing is evolving faster than many expect. Investors who focus only on surface-level trends risk missing the bigger picture. Genuine success comes from digging into the data, understanding specific local markets, and making strategic decisions that secure sustainable returns.
Start by identifying where student numbers are increasing and housing supply remains tight.
Cities like Salford, Manchester, Liverpool, and Bolton tick these boxes, with universities expanding enrolments and solid rental yields to match.
Looking beyond the obvious locations can reveal strong returns that many overlook, for instance emerging hubs in the North such as Sunderland and Bradford, where rental yields frequently surpass 8.5%.
WHAT MODERN STUDENTS EXPECT
Today’s students look for more than just a place to sleep. Fast, reliable broadband is essential, and en-suite bathrooms and secure access are often must-haves.
Communal spaces for socialising and studying also significantly boost appeal. With international student visa issuances up 30% this year, catering to a broader, more diverse tenant base through quality accommodation is vital in attracting and retaining tenants.
STRUCTURE INVESTMENT SMARTLY
This is where many investors stumble. Currently, about 75% of buy-to-let purchases in the student market happen via limited companies, and that’s for good reason.
Such a structure enables landlords to claim full mortgage interest relief, a key tax advantage that individual investors no longer fully benefit from. It also allows more straightforward portfolio expansion without complex financial constraints.
If you don’t get this right from the start, your ability to scale and your returns could be severely limited.
STAY COMPLIANT
Regulation is tightening rapidly, and landlords ignoring this risk serious consequences. Recent laws like the Renters’ Rights Bill, updated fire safety regulations and Awaab’s Law have reshaped the rental landscape.
Landlords need to ensure their HMOs are fully licensed and compliant well before deadlines. Compliant properties attract higher-quality tenants, reduce vacancy periods, and safeguard your income.
Managing student housing is complex – balancing tenant turnover, maintenance, and strict compliance is a full-time job. That’s why collaborating with specialists pays off.
The student housing market is rich in opportunity, but success requires smart, well-informed decisions focused on location, tenant expectations, compliance, and trusted partnerships.
