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Is student accommodation a good investment?


Our latest report, Studying Student Buy-to-Let, explores different aspects of privately rented student accommodation, including where the best yields can be found, what drives demand and what students look for.

Higher education is entrenched in British society and over hundreds of years, the UK has forged a reputation for delivering some of the best universities in the world.  

This is evidenced by the thousands of students who choose UK institutions for their education each year. Despite having significantly fewer places on offer compared to many other countries, only the USA has a higher population of international students, spread across more than 5,500 American universities. 

Drawing so many overseas and domestic students, it is no surprise that higher education has a sizeable fiscal footprint. An Oxford Economics report for Universities UK found that the sector supported in excess of 940,000 jobs and contributed £95 billion in gross output to the economy.  

More difficult to measure is the knock-on effect of this, as countless secondary industries exist to support higher education provision. The private rented sector could be considered one of the most important of these, with more than half of students living away from home throughout the academic year.  

Of these, Higher Education Statistics Agency data reveals that privately rented properties were chosen by just under 570,000 students for their term-time accommodation in 2019/20. 

Throughout the last decade, this is a number that has grown overall, and despite the emergence of purpose-built student accommodation (PBSA), homes let by private landlords have consistently been the most popular choice for those studying in the UK.  

This demand was cited as one of the key things appealing to landlords about letting to students, alongside the reliability of parents acting as rent guarantors.   

Another common motive for investing in properties catering to university attendees was the potential to generate yields, with landlords letting students consistently reporting achieving greater returns compared to those that don’t.   

In our report – Studying Student-Buy-To-Let – we explore where the best yields can be found, what drives the demand and how landlords invest to meet the needs of students now and in future.

Richard Rowntree
Managing Director – Mortgages