by House4Students 
For property investors eyeing the student market in 2025, two options dominate the conversation: traditional Buy-to-Let (BTL) student housing and Purpose-Built Student Accommodation (PBSA). Both have their merits—but which one delivers better profitability?
In this blog, we break down the numbers, risks, and realities to help you decide where to place your money this year.
1. Initial Costs and Entry Points
- BTL: Entry costs vary depending on location. In areas like Reading, investors can expect to pay £350k–£500k for a decent student HMO. On top of that: stamp duty, renovation costs, and licensing fees.
- PBSA: Typically £75k–£150k per unit, with no renovation or licensing required. Many are sold off-plan with staged payments.
- Fractional Ownership: Some schemes now allow investors to buy a fraction of a student property, starting from £10k–£50k. It’s a lower-capital, passive route in—though liquidity can vary.
Verdict: PBSA and fractional win for accessibility, but BTL offers more control and gearing potential.
2. Rental Yields
- BTL: Gross yields in strong student markets can hit 8–10%, but net yields may drop to 6–7% after expenses.
- PBSA: Often marketed with fixed net yields of 7–10% (typically for 3–5 years). Net income is more predictable, but relies heavily on operator performance.
Verdict: Tie. PBSA offers income stability, BTL offers upside with good management.
3. Costs and Overheads
- BTL: Ongoing costs include maintenance, void periods, letting fees, compliance (e.g., EPC upgrades), and hands-on management unless outsourced.
- PBSA: Fully managed with fees baked into the model. But beware: if the operator underperforms or the building has high voids, you’re still exposed.
Verdict: PBSA is more hands-off. BTL can be more profitable if run efficiently.
4. Capital Growth Potential
- BTL: Strong potential in the right locations, especially areas with regeneration or growing university intake.
- PBSA: Limited capital growth. Often leasehold, with fewer resale options. Prices tend to be flat, especially after the rental guarantee expires.
Verdict: BTL wins comfortably here.
5. Exit Strategy and Liquidity
- BTL: Sell to investors or residential buyers. Can remortgage or convert to non-student use (e.g., professional tenants or short-term lets).
- PBSA: Resale market is niche—often limited to cash buyers. Exit can be slow and at a discount post-yield guarantee.
- Fractional: Can be hard to exit quickly. Secondary markets are limited, and pricing control is lower.
Verdict: BTL offers broader and more flexible exit routes.
6. Risk and Return Balance
- BTL: Carries more operational and regulatory risk. Local councils can impose new licensing rules or Article 4 restrictions with little warning. Also, the risk of new PBSA developments nearby can erode tenant demand.
- PBSA: Lower hands-on risk, but depends heavily on the developer/operator. Market saturation in some cities is also a concern.
- Mitigation Tip: A well-located BTL property can be pivoted to professional lets or even short-term lets if the student market shifts—giving it a longer-term hedge.
Verdict: PBSA = low hassle, lower flexibility. BTL = higher risk, higher reward—with options to adapt.
The Bottom Line: What’s More Profitable?
If you’re looking at total long-term return, Buy-to-Let wins—particularly in rising markets like Reading where capital growth is strong, and demand for HMOs remains high.
However, if you want simple, steady income with minimal input, PBSA or fractional options are attractive—just go in with realistic expectations around resale, operator performance, and liquidity.
Need Help Deciding?
At House 4 Students, we work with investors across BTL, PBSA, and fractional models. We’ll help you assess your goals, run the numbers, and choose a student property investment that actually performs.
📩 Want a tailored comparison? Get in touch—we’re happy to help.
