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Regulatory Change: The Renters’ Rights Act 2025 Exemption
One of the most talked-about shifts in the UK rental landscape is the Renters’ Rights Act 2025, which comes into force from 1st May 2026. This law effectively abolishes traditional fixed-term assured shorthold tenancies (ASTs), replacing them with Assured Periodic Tenancies (APTs).
Tenants will be on rolling contracts, able to leave with two months’ notice, and landlords will face new rules around rent increases and eviction procedures. For most private landlords, this removes the familiar security of a fixed-term contract tied to a predictable 12-month tenancy. In the world of student housing, where academic cycles are critically important, this regulatory shift could introduce a higher risk of void periods and disrupt the traditional lettings calendar.
The key advantage for PBSA investors is this: any accredited student accommodation that meets the approved codes of practice is exempt from these changes. Under the new law, operators signed up to recognized industry codes (for example, ANUK) can continue to offer fixed-term common-law tenancies.
This means:
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Student contracts remain aligned with university academic year cycles.
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Revenue predictability for property landlords is preserved.
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Tenancy security is stronger than general private lets, where rolling periodic agreements will be the only option.
Student Housing Demand Still Outstrips Supply
The UK student population continues to grow, both domestically and from overseas, even if some recent reports point to softer booking figures in specific cities. The data indicates rising university applications across key demographics. At the same time, there’s still a structural undersupply of quality student beds in the UK.
In the largest university cities, there are far more students than there are purpose-built beds. In some cases, there is a ratio of over two students per available PBSA bed, creating sustained occupancy pressure. Even with a pipeline of new developments underway, supply isn’t keeping pace with sustained demand, especially in major hubs like Manchester, London, and Glasgow. That imbalance underpins long-term occupancy rates and reduces vacancy risk for well-located student properties.
High Rental Yields vs. Traditional Buy-to-Let
Student accommodation historically delivers higher rental yields than standard residential buy-to-let properties. This is largely down to premium pricing and the density of rooms within a single building.
Data from 2025 and into 2026 shows continued rent growth across many student-heavy cities, with some markets recording double-digit annual increases before incentives. For investors, this means:
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Strong income yields and regular opportunities to reposition assets.
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Ability to increase rents where market conditions allow.
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Benefits from inflation-linked rental growth.
Predictable Academic Cycles and Lower Voids
One of the major concerns for traditional buy-to-let investors is the risk of void periods. Student accommodation, however, benefits from predictable academic cycles and advance bookings made months ahead of term start dates. Purpose-built stock tends to see lower void periods than comparable private lets. This translates into more stable cash flow and reduced income volatility for the investor.
Market Confidence and Investment Momentum in 2026
Despite headwinds like regulatory change and construction cost inflation, institutional and private capital continues to flow into the student sector. Major deals, including mergers between student accommodation giants and record investment volumes, highlight investor confidence that this segment remains profitable and resilient.
At the end of 2025, we at X1 Sales and Lettings announced that we had doubled our PBSA portfolio in just six months. This was a clear indicator of the confidence landlords place in us. Every property was fully booked for the 2025/26 academic year, demonstrating that demand for high-quality, experience-led student living continues to grow. Currently, we are tracking more than 100% year-over-year growth in advance bookings across all of our student sites.
As we move through 2026, the focus remains on strengthening partnerships and expanding the offering across Liverpool and Manchester
Explore Our 2026 Student Property Portfolio
With high rental yields and low void periods, student accommodation continues to be a cornerstone of a resilient property investment strategy.