Updated on 10/05/2024
According to Savills, the UK is expected to face a shortfall of over 600,000 student beds by 2026, as university enrolment continues to rise. In 2023/24 alone, average weekly rents for purpose-built student accommodation (PBSA) increased by 10% to £184, with annual rents in London now averaging over £13,500. This reflects both a national trend of rising demand and a chronic lack of supply—particularly in university cities where up to four students compete for every available bed.
This demand has driven strong performance across the student property sector. Purchase prices remain comparatively affordable, while rental returns are increasingly attractive due to students paying a premium for modern, well-located accommodation.
With consistent student intake, year-on-year rent increases, and limited availability of quality units, student property continues to offer one of the most compelling investment cases in the market—especially for those looking to get started with sub-£100k investments.
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£130,000
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£130,000
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£144,440
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£240,000
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£159,000
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£9,360
In 2024, the average annual rent for purpose-built student accommodation (PBSA) in the UK reached £9,360. This reflects rising demand and limited supply, making student property a strong investment opportunity. (HEPI, 2024)
8%
The average annual rental increase for purpose built student accommodation in 2024 was 8%, showing significant signs of growth for the market. (UCAS, 2024)
18.5%
There has been an 18.5% increase in students enrolled in higher education in the last 5 years. (HESA, 2023)
44.9%
The number of non-UK students in higher education has increased by an impressive 44.9% in the last 5 years. (HESA, 2023)
2.9 million
Over 2.9 million people were enrolled in higher education in the 2023/2024 academic year. (UK Commons Library, 2024)
As an international student hub, the UK offers a lucrative market for property investment, especially in the purpose-built student accommodation sector. As a result, student property investment has become an increasingly popular choice for individuals looking to diversify their property portfolio thanks to the consistently rising demand increasing the rental income on offer in this section.
Investing in student accommodation offers a range of benefits, including stable rental income that is predominantly unaffected by external economic challenges or fluctuations. Purpose-built student accommodation typically offers higher rental yields than other types of residential property, making it an attractive investment opportunity for many.
The demand for purpose-built student apartments has continued to rise in recent times, with the UK student property market expanding significantly as a result. This growth can be attributed to a number of factors, including an increase in the number of students attending UK universities, an increase in the price of university-owned housing, and a demand for modern, high-quality options for student living.
One of the biggest advantages of investing in student property is its resilience during external economic uncertainty. Even during high-profile events such as Brexit and the COVID-19 pandemic, student numbers have continued to rise, proving student property to be one of the most stable and secure investment options.
Student accommodation investment in the UK is a reliable and lucrative market, with purpose-built student accommodation providing a high-quality and convenient option for both national and international students. With the market set to continue its growth as student numbers rise, student accommodation offers an option for investors looking to diversify their property portfolio and generate stable rental income.
Students today are interested in higher quality living to reflect their high student fees and would also like the best from their accommodation, as well as their education. Accommodation For Students (AFS) investigated what students require in a property, the most important aspects are listed below:
Most graduates will be well-versed in the concept of student halls. This type of accommodation is provided by the university and provides students with shared spaces with separate bedrooms near the university campus.
Houses of Multiple Occupation (HMOs) are properties that are owned privately and are usually rented to students with an offering of a private bedroom and shared communal facilities. This type of investment will typically provide a high ROI, particularly if the house is at maximum occupancy. HMOs generally come in the form of an older property that has been converted, and most of them have been used for residential purposes previously.
PBSA or Purpose-Built Student Accommodation is designed, developed and invested in, with student living in mind. PBSA is rapidly rising in popularity, with the majority now providing students with their own apartments, in addition to communal spaces like gardens and gymnasiums.
Purpose-built student accommodation is an attractive option to potential students, with many of them charging a fixed monthly rate which includes all bills including WiFi etc. However, it is important to note that this is typically considered a long-term investment strategy and not something that will provide you with much room for capital growth should you wish to dispose of it down the line. Due to their size and the planning restrictions on these properties, investors will typically have to purchase with cash, instead of a mortgage, which may be a factor in your decision-making process.
Managing your student property can be flexible, depending on how involved in the property management process you would like to be. If you are looking to invest in a HMO, then you could manage the property yourself, or hire a reputable company to take care of this for you. Alternatively, most purpose-built student accommodations will already have a management company in place to take care of the day-to-day letting and management for you. So you have the option of being involved in as little or as much as you’d like to be.
Stoke-on-Trent is home to the esteemed Staffordshire University. There are roughly 15,000 students enrolled at the institution and many of them are part of Stoke-on-Trent’s sizable student population. According to Savills, the city’s student population climbed by 5% in the past year alone, one of the largest rises in the UK. It is easy to understand why.
With the university continuing to attract students from across not just the UK but internationally, the demand for purpose-built student accommodation in the region is only going to increase, and with the current shortfall of quality student beds in the area, now is the perfect time to invest in the Stoke student market.
Student accommodation investment is one of the most secure investment classes available on the market. The rental yields on offer are predominantly strong, and the market is usually unaffected by any external economic or residential market fluctuations. Take the last few years for example, despite high profile issues like Brexit and the pandemic, student numbers have continued to rise, and as a result, so has the demand for private student accommodation.
Student rental can be a profitable venture, as student properties often generate higher rental yields than other types of residential property investments. Rental yields for student rental properties can vary depending on a variety of factors, such as location, property type, and local market conditions, but traditionally stand at around 6 -8%. Here at Knight Knox, we have a number of student properties offering yields as high as 8%.
Purpose-built student accommodation projects are extremely good investments thanks to the increasing demand for them. As universities struggle to meet the rising demand for student housing, privately owned properties are highly sought-after, and the high-quality facilities and amenities that come with purpose-built student accommodation projects see these types of properties much more desired than traditional student houses.
Mortgages aren’t available for student rooms – it is a cash purchase or through using funds lent on another asset, i.e. the re-mortgage of another property.
Yes. Like most normal leasehold properties, PBSA rooms can be sold freely on the open market, however, they must be sold as a student rental property.
No, you cannot live in your PBSA. These properties are specifically designed for students and are not allowed to operate as residential property due to leasehold restrictions.
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