UK's student housing boom: where to invest in 2025 - 31/01/2025

Despite the recent questions over domestic enrolment numbers, the PBSA market remains strong – with investment reaching £3.5bn in 2024, 13% higher than the previous year, according to Savills.

The sector's resilience is supported by a historically strong international student demand, with applications from non-EU students increasing by 3.5% in the 2023/2024 academic year. This growth, coupled with a persistent shortage of student beds – estimated at 580,000 nationally by CBRE – presents a compelling case for investment.

Manchester

The epitomised “Northern Powerhouse” leads the pack with its vast student population and thriving job market. The city's ongoing regeneration projects and future HS2 rail links promise long-term growth potential, with rental yields of 6-7% in popular student areas.

Liverpool

The city of The Beatles follows closely, offering some of the UK's highest rental yields (7-9%) and benefiting from regeneration efforts in the Knowledge Quarter. The city's affordability compared to other major urban centres adds to its appeal.

Birmingham

With its expanding universities and impending HS2 connection, Birmingham presents a growth market ripe for investment. Strong rental yields of 6-8% in areas like Digbeth and Selly Oak are attracting some serious investor attention.

While the PBSA landscape evolves, investors must also consider changing student preferences. A Knight Frank survey highlighted increasing demand for high-quality communal spaces, gym access, and wellbeing initiatives.

With UCAS data showing university acceptances 24% higher than pre-pandemic levels, and occupancy rates for the 2023/2024 academic year at record highs, the PBSA sector appears to point towards continued growth. For investors, the UK's university cities offer a diverse range of opportunities, from high-yield prospects in the north to stable, long-term investments in established markets.