Specialist lender Together says the growth of the UK student accommodation sector is making it increasingly attractive to buy-to-let investors.

In the 2024/25 academic year, over 2.9 million students attended UK universities — one million more than in 2000.

Ryan Etchells, Chief Commercial Officer at Together, explains:  “Student accommodation can offer strong rental yields, reliable demand, and in some cases, less day-to-day hassle than traditional lets. Whether you’re after a hands-off income stream or don’t mind rolling up your sleeves, there’s a student property strategy to suit your style. Just make sure you do your research, understand the local market, plan ahead for the rules and costs involved and speak to a lender who can support your ambitions.”

Etchells’ top tips for landlords include:

1. Pick the right location
   Demand is steady in the right places, but oversupply or falling enrolment can leave properties empty. Cities such as Birmingham, Manchester and Glasgow are currently seeing particularly strong demand for student housing.

2. Purpose-built blocks vs HMOs

   • Purpose-built student blocks are usually managed by professionals, offering higher rents and less hassle, but they come with steep service charges and slower capital growth.

   • Student HMOs often generate higher income but require licences, fire safety compliance, and hands-on management due to wear and tear.

3. Stay ahead of rule changes
   The Renters Rights Bill, expected to become law soon, will replace fixed-term tenancies with open-ended periodic ones, potentially complicating student lets tied to the academic calendar. Purpose-built student blocks may be exempt, but landlords should monitor legislative changes closely.

4. Financing student lets
   Some high street lenders are reluctant to fund student properties, especially those needing renovation, built from non-standard materials, or part of semi-commercial sites. Specialist lenders such as Together offer tailored products designed for both converted houses and modern student blocks.

Yields: student housing vs wider PRS
The attraction of student accommodation is clear when comparing yields. Across the wider private rented sector (PRS), average gross yields typically range between 5% and 6%, depending on region. Student HMOs, however, can generate 7% to 9%, with some purpose-built blocks delivering even higher returns in high-demand cities. While these figures come with greater management and regulatory challenges, they highlight why more landlords are exploring student lets as part of their investment mix.

Etchells concludes: “Specialist lenders understand the opportunities in this market. With the right support, student property can be a lucrative addition to a landlord’s portfolio, delivering higher yields and dependable demand.”