Purpose Built Student Accommodation, often called PBSA, is a rapidly growing sector in the UK property market. For investors, it represents a resilient and high-yielding asset class that stands firm against economic shifts. This article explores why PBSA is a compelling addition to any investment portfolio, using Graduation House, a key development in Nottingham, as a prime example of this investment in action.
Purpose Built Student Accommodation refers to housing designed and built specifically for students. Unlike traditional houses in multiple occupation or halls of residence, PBSA offers high-quality, modern living spaces. These developments often include a range of amenities such as gyms, cinema rooms, study areas and all-inclusive bills, creating a vibrant community atmosphere.
For students, the appeal is clear. They get a secure, convenient and comfortable living experience close to their university. For investors, this high demand translates into consistent rental income and a stable investment.
The case for investing in PBSA is supported by strong market fundamentals. The UK is a leading destination for higher education, attracting a large number of both domestic and international students every year. UCAS projects that there will be one million student applicants by 2030, a figure that highlights a growing demand for quality housing that current supply levels cannot meet.
This gap between supply and demand creates a significant investment opportunity. Key benefits include:
A perfect example of a high-performing PBSA investment is Graduation House in Nottingham. Developed by Prosperity Wealth, this project of 162 student apartments showcases the best of modern student living. It is strategically located in Beeston, with a tram stop directly outside that offers easy access to the University of Nottingham and Nottingham Trent University.
Nottingham has a student population of over 96,000, yet there is a major undersupply of quality accommodation. This has driven rental growth, with average student rents in the city rising by 15.5% between the 2021/22 and 2023/24 academic years. Graduation House capitalises on this demand, providing tenants with premium amenities and investors with a secure and profitable asset.
Securing purpose built student accommodation finance is a key step for investors. Financing options for PBSA are specialised and can differ from traditional buy-to-let mortgages. Lenders who are active in this space will typically assess the development’s location, the experience of the developer and the local university’s reputation.
Investors often use a combination of personal capital and specialised loans. At Prosperity Wealth, we can tailor flexible payment plans to suit individual requirements, allowing your funds to work as efficiently as possible. This approach often starts with a lower initial deposit, with the remaining balance structured over the build period.
When considering what is classed as purpose built student accommodation SDLT (Stamp Duty Land Tax), the rules can be complex. Generally, PBSA falls under commercial property tax rules, which can be more favourable than residential rates. However, the specific SDLT treatment depends on the structure of the purchase and whether you are buying a single unit or multiple units within a development.
It is always recommended to seek professional tax advice to understand the specific SDLT implications for your investment, as regulations can change and individual circumstances vary.
We are a team of passionate, customer-centric property people dedicated to delivering quality homes and property investment in the simplest way possible. With a property portfolio valued at over £455 million in 2023, our results speak for themselves. We have delivered over 4,000 homes across 48 developments, providing investors with carefully selected, high-yield opportunities. A key part of our service for PBSA properties like Graduation House is that they are fully managed, offering investors a simple, hands-off investment complete with lettings and building maintenance. Our approach is built on transparency, expertise and a commitment to helping our clients achieve their financial goals through property.
The primary benefits of investing in purpose built student accommodation are that they offer high and consistent rental yields, strong demand from a growing student population and it gives you an asset against economic downturns. This is what makes investing in PBSA’s a reliable way to diversify your investment portfolio.
Yes, most PBSA investments are a hands-off investment because they are fully managed. This management includes management of the day-to-day operations, including lettings, maintenance and tenant relations. A professional management company handles the admin of your property investment in PBSAs which is what makes it a hands-off investment.
Nottingham is one of the UK’s leading university cities. It has got a large and growing student population and combined with the fact that it has not got enough quality housing it create a strong rental demand. This is what makes Nottingham an ideal location for investing in purpose built student accommodation.
Oliver Thacker is a Property Investment Consultant at Prosperity Wealth. With a background in both national and local estate agencies, he has a wealth of knowledge and experience in the UK property market. Oliver specialises in helping clients build income-generating, off-plan, buy-to-let portfolios and is the go-to expert for PBSA investment advice.
