There are around 2.3 million students in the UK, most of whom require accommodation. The website everyinvestor.co.uk in May 2017, listed their five recommended areas or hotspots that investors in student accommodation should consider. These five areas have a shortage of accommodation to fulfil a high demand for purpose-built student accommodation.

Many students prefer modern purpose-built accommodation to student houses and are prepared to pay extra rent to live in them.

Bradford is increasing its student population by 30% by 2024. There is a shortage of student accommodation in the city.

In Huddersfield, there are only 4,608 purpose built student room for 19,260 students.

Leicester University has invested £190 million in expanding its campus. This has resulted in an increase in the number of students but not a corresponding increase in purpose-built student accommodation.

Stoke-on-Trent with a large strident population of 22,700 in its two universities has a large undersupply of accommodation.

In these five university areas, landlords can achieve high rental yields between 8% and 10%. The government is encouraging the development of student accommodation by classifying purpose built student accommodation as commercial property. This means that purpose built student property is not subject to the increased 3% stamp duty applied to most buy to let property.

Low interest rate commercial mortgages are available to finance student accommodation purchases. Investors can purchase whole accommodation blocks or invest in a share of properties. Many landlords use management companies that take care of collecting rents, vetting tenants, maintenance and repairs.