Your complete guide to:

UK student property
investment

Purpose built student accommodation investment is one of the UK’s best performing asset classes and offers some of the highest returns on the market.

Is student accommodation
a good investment

Over the last 10 years, the UK’s student accommodation investment sector has become a stand-out choice for property investors.

Once a niche asset class, the popularity of student property has seen the market segment now worth £51 billion (Knight Frank). Its rise to prominence in recent years has been partly due to the sector’s evergreen nature – come rain or shine, there will always be university students and a need for accommodation to house them close to their chosen university campus.

Globally known for its academic excellence, the UK is home to some of the best-ranked universities with 90 included in the QS World University Rankings 2021. With 4 UK universities are ranked in the global top 10, the education system is particularly appealing to international students.

The latest data released by UCAS has shown that there are 2.4 million students currently enrolled in universities across Great Britain, and this amount is forecast to rise by an extra 500,000 students by 2030 (JLL).

With so many positive factors, student accommodation has emerged as a good investment for investors and landlords who want to secure a reliable rental stream from a fully managed property.

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What’s in the guide?

  • Discover why Student Property is the UK's No.1 Asset Class
  • How the Investment Works
  • Why Student Property is an Evergreen Investment
  • Discover the Best UK University Towns and Cities to Invest in
  • FAQs: Get Your Questions Answered
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to UK buy to let investment property
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What is a student accommodation investment?

PBSA

Purpose Built Student Accommodation is the most popular way to invest in this lucrative market segment and offers investors a fully managed approach to buy-to-let investing.

Individually priced en-suite or self-contained studio apartments within a development are sold on a long leasehold basis to individual investors and managed by a specialist operator.

The low entry level nature of the individual student rooms for sale within a development means that there is typically a 0% Stamp Duty rate payable on the unit.

HMO

Houses in Multiple Occupation is another option for student accommodation investors however, several new regulations have made this option less appealing to buyers.

What’s more, a higher rate of Stamp Duty is payable on an HMO as it they are generally classed as a residential buy-to-let investment. HMOs are therefore an expensive option for those entering the student accommodation investment market.

Town Square Invest specialises in sourcing profitable purpose built student accommodation investment opportunities across the UK. Contact us for more information about our current projects and the latest availability.

Is this the right type of investment for you ?

This investment is for you if:
  • You want to enter a stable property market
  • You want to secure reliable rental returns
  • You understand that property values fluctuate
  • You are looking for a fully managed asset
It is not for you if:
  • You are looking for a visa
  • You or a relative want to live in the property
  • You are looking for a holiday home
  • Need to flip for a quick profit

Covid-19 and
student property

The pandemic has changed the shape of learning globally, with universities adapting their teaching to a mixture of online and campus learning. For investors considering entering the student property market, it is important to remember that certain classes are not able to move online (medical and health, science and technology for example), therefore, campus learning is vital. For these students, living in safe and modern accommodation is more important than ever before.

With the roll-out of a vaccine now underway across the UK, universities are set to show their resilience as more young people enter the education system to continue their learning.

What’s more, the demand for university places tends to increase when the UK’s unemployment rate is higher, meaning that the demand for student rooms could increase at a higher pace.

Brexit and student intake

After the USA, the UK is the most popular destination for international students however, since the UK left the EU, the number of European students has declined. The fall in EU applicants is partly because of the lack of uncertainty surrounding a Brexit deal, and questions around what the landscape would look like for European students studying at British universities post-Brexit.

As the dust settles on the UK’s departure from the EU, there remains plenty of positives for EU students including favourable exchange rates and a generous post-study work visa system.

Announced by the government in September 2019, the new system allows students to remain in the country for 2 years after graduation – up from just four months previously. There is also a three-year visa available for Ph.D. graduates.

Outlook for
student numbers

End of cycle application data from UCAS revealed that 728,000 students applied to start a full-time undergraduate course at UK universities during the 2020/21 academic year. This figure marked nearly 22,500 more applicants than the previous year.

The same report highlighted a decrease of EU students of almost 40% however, looking beyond Europe, applications from overseas students increased by 17.1% - with a strong demand from China (up 21.5%) and India (up 25.5%).

Despite the decline of EU students, overall European students do not make up a large market share and, according to Savills, overseas students are 60% more likely to stay in PBSA. What’s more, early indications show that applications will increase again for the 2021/22 academic year, with an 8.4% increase in applications reported when compared to the last cycle. The increase coincides with a swell in the UK’s 18-year-old population.

Student accommodation
investment yields

As UK university applications increase as a result of an increase in the 18-year-old population, there is an increasingly positive outlook for student property yields.

With the UK opening up and people adapting to the ‘new normal’, 97% of universities plan to teach courses in person in 2020/21.

For student accommodation investors, yields should be robust as demand for housing increases in line with an uptick in student numbers.

Town Square Invest’s student property investment opportunities provide investors with an assured rental yield for a predetermined time, meaning that investors will generate a return whether their unit is occupied or not.

Fully managed
asset class

No matter where you are on your investment journey, a fully managed property is one of the best ways to sure a passive income stream.

Whether you are a seasoned landlord, an overseas investor, investing to boost your retirement income, or a first-time investor, a fully managed asset might be the best option to free up your time whilst generating a rental income.

From tenant checks and paperwork to ensuring your income is paid on time, a fully managed student accommodation investment is a great way to secure a reliable passive income with no work required.

UK University towns
and cities

5 actionable considerations for student accommodation investors:

5 actionable considerations for student accommodation investors:

Featured property

Silk Mill Suites

Silk Mill Studios is the closest privately built student accommodation to Lancaster University campus.

Deluxe studios within the development will provide modern and affordable rooms for a rising number of students in Lancaster.

  • Completed & operational
  • Fully furnished and managed
  • 7% NET p.a. for 5 years
  • The closest new-build to the university campus
Investing in student
accommodation FAQs
  • How does the ownership work?
    A unit within a purpose built student accommodation is sold on a leasehold basis. Investors should ensure that the lease is 125 years or longer. You will own the full Title Deed.
  • Can I sell my unit at any time?
    As you will own the full Title Deed, you can sell your student property any time after Completion.
  • How much Stamp Duty applies to PBSA?
    Stamp Duty Land Tax (SDLT) applies when a person/company purchases a property or land in the UK. The rate varies based on an individual basis, the price of the property and on the asset class entered. PBSA is currently 0% Stamp Duty rated.
  • How is the investment managed?
    A student accommodation project with good management will ensure the long-term viability of the investment and provide income security. A management company with a good reputation and a track record managing this property type will underpin the success of your investment.
  • Who is responsible for repairs and maintenance?
    The fully managed natured of student property investment means that the management company will deal with any repairs and maintenance. Your property may also be sold with a new-build warranty in place. Typically, all management fees and maintenance will be deducted before you receive your returns and should be taken into consideration when purchasing student property.
  • What does PBSA mean?
    PBSA is an abbreviation of Purpose Built Student Accommodation.
  • What is an off plan property investment?
    An off plan property investment refers to a development that is under construction.
  • What is a student HMO?
    Short for Houses in Multiple Occupation. A house/home is categorised as HMO if at least 3 tenants live there, forming more than 1 household. Tenants share toilet, bathroom or kitchen facilities with other tenants.

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