The Best Areas to Invest in Student Property 2023 (Top 10)

To help pinpoint exactly where the best areas to invest in student property are, we’ve used some metrics to evaluate a cities investment potential.

Not only do we look at the underlying market data, including the number of students, average property prices, average rental yield, and potential for capital growth, but we also look at reasons students choose these cities and why this is likely to continue.

These reasons include nightlife opportunities, lifestyle and affordability, employment potential, and university quality.

The data used is for the entire housing market of the city. While this won’t be the most accurate for specific student property investments, it does show the general health of a housing market and whether it is worthy of investment.

If you have any questions about how we collect our data, be sure to check at the bottom of this guide for a brief explanation.

Without further ado and in no order, the top 10 best areas to invest in student property in 2023 are:

• Student Population: 100,000  
• Avg. Property Price: £254,985 
• Avg. Gross Rental Yield: 7.78%  
• Predicted Regional House Price Growth: 11.7%  

Undoubtedly one of the best areas for UK student property investment 2023, Manchester boasts one of the UK’s most prevalent student scenes.

With affordable house prices, and some of the highest growth rates in all of the UK, Manchester property is an incredibly lucrative asset class.

The city boasts some of the best universities in the world, with the Redbrick University of Manchester recently voted in the world’s top 30 – its highest-ever position.

Aside from its choice of fantastic institutions, including Manchester Metropolitan University and the University of Salford, Manchester boasts a lively nightlife scene along with some attractive graduate roles in the many high-profile businesses located in the city.

The current average rental yield in Manchester stands at around 6.62%, the second-highest on this list – although student investments will net you higher returns.

Manchester property investment, like Liverpool, also boasts a huge international student population.

Around 20,000 students in Manchester are from overseas, with a huge amount coming from China, making PBSA especially lucrative in the city.

Capital growth prospects are also very high for the Manchester housing market, with expected growth in average house prices of 11.7% by 2027 for the North West.

Thanks to these prevailing market statistics, Manchester belongs on any list of the best areas for student property investment.

Its residential market is also thriving, with the likes of Embankment Exchange offering huge 6% returns from only £179,950.

To learn more about Manchester student property, be sure to check out our dedicated guide, updated for 2023.

If you’re thinking of making a student accommodation purchase in this top Northern hotspot, then be sure to focus on investments in the Salford area and city centre locations for the best possible returns.

Why Make a Student Accommodation Investment in Manchester?

• Manchester boasts one of the largest student populations in Europe, with over 100,000 students.
• The city has some of the highest capital growth rates in the UK, with a 289% increase since 2003.
• The University of Manchester is one of the UK’s top universities.
• Manchester was voted the best UK city to live in, according to the Global Liveability Survey.
• Manchester has the second-highest graduation retention rate in the UK, with over 51% of graduates staying in the city.

• Student Population: 60,000+
• Avg. Property Price: £243,042  
• Avg. Gross Rental Yield: 4.80%  
• Predicted Regional House Price Growth: 11.7%   

The second Yorkshire-based university city on our list, Sheffield is another popular destination to invest in student accommodation.

With growing universities like the University of Sheffield and Sheffield Hallam to choose from, Sheffield’s 60,000 students have been spoiled for choice.

Like Leeds, the city offers incredible affordability alongside a thriving student and cultural scene.

There’s also a large Chinese population in the city, with around 6,000 students making PBSA incredibly popular.

Sheffield property investment offers a similar level of potential to Leeds for those who wish to invest in student accommodation.

The average yield in Sheffield is just slightly lower than that of Leeds, at 4.80%.

However, many postcodes in Sheffield come with much more significant yields.

The S1 postcode, which spans the city centre, is a good example of this and offers rental yields of 8.66%.

With S1 being one of Sheffield’s best student accommodation areas, those who wish to buy student accommodation in Sheffield should definitely explore city-centre locations for the best rental returns.

Thanks to these high returns, Sheffield is one of the best places to invest in student property in the coming years.

Why Make a Student Accommodation Investment in Sheffield?

• Sheffield boasts over 60,000 students.
• Average property prices in Sheffield are very low, with average rental yields showing a lot of potential.
• Regional property price growth sets Sheffield apart from selected other UK regions, with the potential to see an 11.7% rise by 2027.

• Student Population: 65,000  
• Avg. Property Price:  £298,638  
• Avg. Gross Rental Yield: 5.92%  
• Predicted Regional House Price Growth: 11.1% 

The first non-English city on this list, the Welsh capital of Cardiff is another UK city well-known for its thriving student market.

With around 20% of the population being students and four top universities, purpose-built student accommodation is a hot commodity in the city.

In particular, Cardiff University is a huge draw, ranked as the 25th best in the UK by The Times.

Ranked as the UK’s friendliest city, Cardiff offers a lot for students, with fantastic nightlife opportunities and wonderful places to explore, like Saint Fagans – voted Museum of the Year in 2019.

Cardiff itself is a city that’s seeing a high level of regeneration.

With trendy new bars and restaurants popping up across the city, and huge past projects such as Cardiff Bay, it’s easy to see why many property developers are introducing new property developments in the city.

While the average rental yield in Cardiff is a little lower than some of the other cities in this list of where to buy student accommodation in the UK, the high student population and strong capital growth prospects make this city stand out as a great place to invest in student accommodation.

However, property prices in Cardiff are often a bit higher than other UK cities on this list, which may be a struggle for investors.

For this reason, while Cardiff property investment is one of the best places to invest in student property, it may be too expensive for some.

Why Make a Student Accommodation Investment in Cardiff?

• Cardiff was voted the best university city in Wales.
• Cardiff is a thriving regeneration city with a lot of investment interest.
• Wales has the second-highest predicated capital growth rate by Savills.

• Student Population: 42,000+
• Avg. Property Price: £194,421  
• Avg. Gross Rental Yield: 6.75%% 
• Predicted Regional House Price Growth: 11.7%  

Home of the Geordies, Newcastle is the largest city in North-East England and deserves a feature in any guide to the best place to invest in student accommodation.

Average student population statistics are slightly below other locations on this list, but don’t let that fool you; Newcastle offers a compelling case for property investment.

With some of the lowest property prices in the UK, and huge average yields of 6.75%, the city is worth exploring for its student accommodation investment potential.

Newcastle is always one of the most popular places to go for students, thanks to its famous nightlife scene.

Nightlife in Newcastle is renowned as some of the best in the UK, with spots for every music taste dotted around Diamond Strip and Greys Street.

In fact, in a 2019 guide to the best UK universities for nightlife, Newcastle came in third after Liverpool John Moores University and the University of Liverpool.

With four universities to choose from, there is always a high level of demand for purpose-built student accommodation.

Newcastle’s predicted regional property price growth is also sizeable, with the joint-third highest growth in England alongside the West and East Midlands.

Considering all these factors, Newcastle is certainly one of the best locations for UK student property investment in 2023.

Why Make a Student Accommodation Investment in Newcastle?

• Low property prices make Newcastle a great choice for investors seeking an affordable spot to invest in student accommodation.
• Rental yields in Newcastle have a high average, suggesting attractive rental returns.
• One of the best and most affordable nightlife scenes in the UK.

• Student Population: 21,009 +
• Avg. Property Price: £556,878
• Avg. Rental Yield: 4.05%
• Predicted Regional House Price Growth: 3% 

If you’re keen on investing in property in the South of England, Brighton is a student city that should be on your radar.

Brighton has a reputation as a great university city, especially for those studying for more creative degrees.

This seaside town is also known for its sizeable LGBTQ community and forward-thinking attitude.

International students make up 27% of the student population in Brighton, which is a key indicator of the quality of education and lifestyle in the area.

With two universities in the city, the student population is the lowest on this list, but PBSA is incredibly lucrative in the area.

The main issue with Brighton for many investors is the cost. Average property prices are comfortably the highest on this list, with returns the lowest 4.05%.

Despite these market statistics, student property investment in Brighton is still a solid choice and frequently ranks amongst the best places to invest in UK student property.

Why Make a Student Accommodation Investment in Brighton?

• Brighton is a good choice for investors who want to invest in student property in the South.
• Brighton boasts a high population of overseas students.
• While capital growth is expected to be low over the coming years, it is still higher than the growth predicted for London.

Now that we’ve concluded our list, it’s a good time to ask is student accommodation a good investment in the UK? Why invest in student accommodation over residential buy-to-let?

As demand continues to rise and the strength of the student property market continues increasing, student accommodation is an investment not to be missed.

Many property investors class student accommodation as the best property type due to the higher affordability, stronger yields, and constant demand from the UK student buy-to-let market.

In recent years, fewer students live on standard campus on-site university accommodation and instead choose to rent high-quality apartments in and around the city centre.

This change in student attitude has led to heightened demand for new build developments, with many landlords taking notice.

The number of UK 18-year-olds applying to an undergraduate course in 2023 ranks as the second highest on record – with 314,660 applying, down slightly from 320,420 in 2022 but significantly higher than the pre-pandemic figure of 275,300.

To learn more, check out our guide asking, “is investing in student accommodation a good idea?”

The figures suggest that Liverpool and Manchester are the best student cities UK investors should focus on.

But where should you invest in the cities?

Like residential buy-to-let investment types, Liverpool student lets and Manchester student investments tend to be found in highly populated parts of the city.

In most cases, this means investing in the city centre, particularly since students favour being near their university campus along with local attractions and nightlife.

For Liverpool student lets, the best postcodes tend to be L1, L6, and L2.

Not only are these postcodes considered some of the best Liverpool student accommodation investment hotspots for tenant demand, but they also generate high yields and capital growth returns for investors.

Manchester, which is considered the best student city in the UK by many investors, also boasts some strong postcode areas for those who want to maximise returns.

M3, for instance, in the city centre, is known to generate high rental yields while also being one of the best student accommodation areas in the city.

For students attending the University of Salford, postcodes like M5 and M6 occupy the area and make a good option for those looking to find a student accommodation investment for sale.