Student housing investment involves purchasing a property (such as a student house, room or pod) with the intention of renting it to a student. This type of investment stands out as a safe option in the face of housing demand due to the increasing number of students.

According to data from the Higher Education Statistics Agency (HESA), there are more than 2.8 million students in higher education in the UK, an increase of over 18.5% in the last five years. Particularly in the number of students from outside the UK and there has been an impressive increase of 44.9% over the same period.

Student Housing Market Overview

According to data from the Higher Education Statistics Agency (HESA), the number of students studying higher education in the UK has increased by 18.5% in the last five years. In particular, there has been a large increase in the number of international students; This has caused a significant increase in the demand for student housing.

There is a huge increase in demand for Purpose-Built Student Accommodation (PBSA) in particular. The inability to keep up with the student bed capacity ensures that the sector will continue strongly in the future.

What are the Advantages of Student House Investment?

1. High Demand: Properties available for rent to students are generally located in areas close to university campuses and city centers. Demand is consistently high from students seeking comfortable and affordable accommodation. The increasing number of students in the UK is increasing the demand for private student properties. According to historical HESA data and Savills forecasts between the 2016/17 and 2022/23 academic years, the number of full-time students in the UK will increase by over 15%. These high figures further increase the demand for private student properties.
2. Low Capital Requirements: Student properties offer lower entry prices than residential and commercial properties due to the offering of smaller units. This low entry price allows investors to achieve high rental income in a shorter period of time. This increases the attractiveness of student accommodation investment because it provides faster returns at a lower cost.
3. High Rental Yield: In student housing, more than one student shares the same house, which can increase rental income. Investing in student housing, especially in popular university towns, has the potential for higher rental returns. It also reduces the risk of the house remaining completely empty. They generally offer higher rental returns than residential properties. According to Paragon Bank, student properties across the country average gross returns of 6.15% to 6.6%; this rate is higher than that for residential properties, which range from 5.43% to 5.6%. This gap has been evident over the last five years, with student property returns consistently outperforming housing returns. (Check out the Deakin's Yard project with 8% net rent guarantee for 3 years.)
4. Recession Resilience: Student properties are generally unaffected by external economic uncertainties and are seen as a stable investment option. Students often choose to stay in the same place for an academic year, which allows those who invest in student housing to obtain a stable and ongoing rental income. In some cases, students' education period may extend up to 4-6 years.

Best Places to Invest in Student Housing

A good location ensures accessibility for students and proximity to university campuses. Therefore, it is important to make sure that the area you are considering investing in is one of the popular university cities.

• Manchester

Manchester is a city with a large student population and high demand, offering an excellent investment opportunity.

Greater Manchester is home to three of the most prestigious universities in the UK. The University of Salford offers a leading studio for art, media and creativity at the heart of MediaCityUK. The University of Manchester is the country's largest single regional university and one of the universities in the Russell Group. Manchester Metropolitan University is a pioneer in sustainability and is one of the most popular options in the UK.

Manchester is notable for its increased student flow, thanks to its extensive university network. There are more than 100,000 students enrolled in the city, making it home to one of the largest student populations in Europe. This makes it an ideal destination for student housing investments.

• Sheffield

Sheffield has a significant student market and demand for student housing units is constantly increasing.

Sheffield has significant potential, especially in terms of student housing investments. The city stands out as one of the UK's leading markets. It is home to two leading universities and more than 65,000 students.

Sheffield's population has increased significantly in recent years, with the number of international students increasing by 30% to 11,000. These figures show that Sheffield is an attractive target for student housing, especially given the lack of purpose-built housing in the area. This has created a profitable market gap for investors.

• Stoke

Stoke-on-Trent is home to Staffordshire University and its student population is growing.

Stoke-on-Trent is home to Staffordshire University and has around 15,000 registered students. The city's student population increased by 5% last year, one of the largest increases in the UK overall.

With the university attracting students both nationally and internationally, demand for purpose-built student housing is increasing in the region. This, combined with the lack of quality student accommodation in the area and the increase in demand, means it is an ideal time to invest in student housing in Stoke.

Why Should You Invest in Student Real Estate?

Residential properties have higher potential for value growth, while student properties offer consistently high rental yields and are less likely to face empty periods thanks to the unwavering demand for student beds. Student properties have lower entry prices compared to residential properties.

You can contact us here to get more detailed information about real estate investment services in the UK.