Purpose Built Student Accommodation (PBSA) is one of the fastest growing sectors in the UK property market. The number of 18-year-olds in the UK is growing, and international students still flock to UK universities. However, there is a national shortage of student beds because building new housing cannot keep up with this growth.

Students increasingly want modern, professionally managed buildings with fast Wi-Fi and gyms or other amenities, instead of older, shared rental houses. Hence, PBSA has become very popular as an area for development and potential property investment.

This article looks at the drivers to investing in PBSA in the context of a scheme in Leicester where we recently succeeded in obtaining planning permission.

Returns on PBSA investment in Leicester
Property investment in Purpose-Built Student Accommodation (PBSA) in Leicester delivers an average net rental yield of 6.0% to 8.0%. This places Leicester among the higher-yielding cities for student accommodation in the UK. Prime city-centre locations (LE1 postcode) sit at the higher end, averaging around 7.2% to 7.3%.

High-quality PBSAs in the city maintain strong occupancy rates between 92% and 95%, with prime locations near campus hitting up to 97% to 99%.

While PBSA is primarily an income-driven asset, broader property capital growth in Leicester is forecast by Savills to rise by 22.2% between 2025 and 2029.

Prospect House and Readson House comprised former University of Leicester educational use (Class F1) in the centre of Leicester (LE1), very close to the De Montford University campus.