by House4Students 
As student demand continues to grow and the rental market remains competitive, many investors are asking: where should I be investing in 2025? The UK has no shortage of university towns, but not all student cities offer the same return on investment. We’ve ranked the top UK cities for student property investment based on rental yields, tenant demand, university quality, and long-term growth potential.
Here’s where smart money is going this year:
1 LIVERPOOL
🔥Why it’s hot: A large student population, affordable property prices, and excellent rental yields make Liverpool a perennial favourite. The city is home to multiple universities and offers yields as high as 9–12% in the right areas.
💡Investor insight: Purpose-built student accommodation (PBSA) and short-term lets both perform well here, especially near the city centre and key transport links. Liverpool also attracts a significant number of overseas students, which boosts year-round demand.
2 MANCHESTER
🔥Why it’s hot: Manchester’s student population exceeds 100,000, and the city’s reputation as a vibrant student hub is well-earned. With institutions like the University of Manchester and Manchester Metropolitan, it consistently ranks high on UCAS tariff points and attracts a large share of high-achieving students.
💡Investor insight: Look for HMOs and well-managed PBSA units near the universities and in student-heavy suburbs like Fallowfield. The international student population remains strong, creating consistent demand.
3 NEWCASTLE
🔥Why it’s hot: Home to Newcastle University and Northumbria University, the city draws a diverse mix of UK and overseas students. It offers great affordability for investors and consistently high demand from tenants.
💡Investor insight: Areas surrounding the city centre and university campuses offer strong yield potential, and both universities attract mid-to-high tariff students, ensuring a quality rental base.
4 LEEDS
🔥Why it’s hot: Leeds offers a huge student population across multiple universities, including the University of Leeds—a member of the Russell Group. This attracts top-tier students and bolsters long-term investment confidence.
💡Investor insight: Yields are attractive, particularly for HMOs and PBSA developments in Hyde Park, Headingley, and city centre locations. Leeds is also a magnet for overseas students, who often seek high-quality, professionally managed accommodation.
5 READING
🔥Why it’s rising: While often overlooked, Reading is a high-potential market thanks to the University of Reading’s growing student population, strong international recruitment, and increasing applicant quality. It offers excellent transport links to London, further boosting its appeal.
💡Investor insight: Reading is gaining traction with overseas students and those seeking a high-quality academic experience. With yields around 6–8%, it’s a solid bet for investors looking to secure property in a rising market before it becomes saturated.
The Bigger Picture: Trends in Student Demand
Recent data shows:
- The UK welcomed 758,855 international students in the 2022/23 academic year—663,355 from outside the EU and 95,505 from the EU.
- In 2023/24, international students made up 14% of all undergraduates and a striking 51% of all postgraduates.
- Undergraduate applications have risen by 1.0% year-on-year, reaching 600,660 in 2025.
- Postgraduate enrolments dipped slightly (by 4.4%), but international interest remains resilient.
- There has been a 14% drop in visa applications in 2024, likely a temporary correction following previous years of rapid growth.
This paints a picture of a still-robust international market—with particular strength in postgraduate demand, where half of all students are now from abroad. For investors, international students often seek premium accommodation, stay longer, and are less price-sensitive.
What Should Investors Look For in 2025?
✅ High student population density – ensures strong annual demand
✅ Universities with high UCAS tariff scores – attract more committed, longer-term students
✅ International student population – increases stability and reduces voids
✅ Regeneration projects – boost long-term capital growth
✅ Purpose-built developments – offer hands-off income and modern appeal
✅ University expansion plans – more students = more rentals needed
Conclusion
Student property continues to offer strong returns in 2025, especially in cities that combine large student populations with quality universities and rising rental demand. Liverpool and Manchester remain dominant, while Reading is emerging as a serious contender—especially for those looking to invest ahead of the curve.
At House 4 Students, we specialise in high-quality student accommodation in Reading. Whether you’re a new or experienced investor, we can help you identify the right opportunities.
📩 Get in touch today to learn more about student investment potential in Reading and how we can help you stay ahead of the market.
Sources
- HESA: UK Higher Education Student Statistics 2023/24 (hesa.ac.uk)
- UCAS: Undergraduate Applicant Data – 2025 Cycle (ucas.com)
- House of Commons Library: International Students in UK Higher Education (commonslibrary.parliament.uk)
- StudyTravel Network: UK Postgraduate Enrolment Update (studytravel.network)
- PIE News: International Student Visa Trends (thepienews.com)
