Student property investment refers to an investor buying property to rent exclusively to student tenants.
There are currently two common ways buyers can make a student property investment in 2023.
- Purpose-built student accommodation. Sometimes referred to as PBSA, this is a type of student property specifically built with students in mind. They’re usually located nearby to university campuses and come with facilities like WIFI, onsite gyms, and building management. There are plenty of types of PBSA, including new builds and renovated transformed student property of older builds.
- Houses in Multiple Occupations. Otherwise known as HMOs, an HMO is typically a shared student house that is rented to multiple student tenants. These tenants will share amenities like kitchens and bathrooms but will separately pay rent.
As for which method you choose, it will highly depend on your goals. HMOs are commonly found outside of the city centre and typically charge lower rent to their student tenants.
However, due to multiple paying tenants, returns can be incredibly high for HMOs.
On the other hand, student accommodation is popular among both domestic and international students and will typically be found in prime city-centre locations nearby to university campuses.
PBSA has rapidly increased in popularity over recent years, with the demand for student HMOs falling, as students tend to pick higher-quality housing that outdated terraced houses can’t compete with.
In fact, a report from Savills in early 2021 found that £5.77 billion was spent on PBSA in 2020 – the highest-ever amount – with investors confident in the ability of UK PBSA to deliver high returns despite Covid-19.
This confidence looks well-founded, with an increasing number of students entering UK universities from across the world. The 2021 academic year alone recorded an 8.4% increase in university applications, according to the UK University Admissions Service, UCAS.
You can learn more about the student property market and the latest student property investment opportunities by checking out our in-depth student property investment guide for 2023.
Where to Invest in Student Property in 2023?
To get the most out of a student investment, you’ll need to invest in the right city.
To do this, there are a few metrics you need to keep in mind to get the highest chance of a successful investment.
- Focusing on cities with multiple quality universities.
- Employment opportunities for postgraduates.
- Graduate retention rates (how many graduates stay in the city after studying).
- Nightlife opportunities for students.
We’ve got a blog post outlining the top 10 best places to make a student investment, so be sure to give it a read.
But likely, the top two standout locations boasting the strongest student property sector in the UK are Liverpool and Manchester.
Both cities have an abundance of student houses, PBSA, and off-plan student property opportunities, boasting two of the best graduate retention rates in the UK.
These options are some of Europe’s elite university cities, comfortably ranking in the top 25 student cities, and are well worth your time researching further.
You can read our dedicated guides to Liverpool student property investment and Manchester student property investment by clicking the links.