Why Student HMOs Are Not a Good Investment in Today’s Market

July 23, 2025

For many years, student Houses in Multiple Occupation (HMOs) were considered a golden ticket for property investors. The logic seemed simple: universities would keep growing, students would always need affordable housing, and landlords could charge per room, generating strong cash flow compared to traditional Buy to Lets.

But times have changed, and student HMOs no longer offer the security or returns they once did. Across the UK, landlords are finding that these properties come with rising risks, falling demand, and significantly more hassle than professional HMOs or other property investments.

At Foot Forward Properties, we have never taken on student tenants, and we never will. Here is why we believe student HMOs are not a good investment in 2025 and beyond, and why professional HMOs remain a far better option for long-term, high-yield property portfolios.

Declining Demand for Student Accommodation

One of the biggest challenges facing student HMOs is a decline in student numbers across UK universities, which directly reduces the pool of potential tenants. Several factors are contributing to this trend.

Fewer Domestic Students Attending University

University is no longer the default path for many school leavers. The rising cost of tuition, combined with the burden of student debt and high living expenses, has led many young people to either delay higher education or skip it entirely in favour of apprenticeships and direct employment.

Even among those who do attend, an increasing proportion are choosing to live at home during term time to cut costs, meaning they no longer need shared student housing. This reduction in demand puts significant pressure on student landlords who rely on consistent occupancy to cover mortgage and maintenance costs.

Falling International Student Numbers

International students, who once made up a substantial portion of the student rental market, are no longer coming to the UK in the same numbers. The previous government tightened visa conditions, making it harder for students to bring dependents and work during their studies.

The current government has continued this trend by reducing the duration of graduate visas, making the UK less appealing as a study destination compared to countries like Canada and Australia.

As a result, international student numbers have fallen across almost every university, further reducing demand for student-specific housing.

University Course Cuts and Campus Closures

Perhaps the biggest risk for student HMO landlords is the fact that several universities have started culling courses and even closing campuses altogether. When this happens, the demand for student rentals in those areas can collapse overnight.

All it takes is for one popular course to be discontinued, or for a satellite campus to shut down, and your carefully filled HMO can sit empty. Unlike professional HMOs, which attract a broad tenant base, student HMOs are tied directly to the fortunes of nearby universities, making them a much riskier investment.

High Upkeep and Repair Costs

Even when fully occupied, student HMOs tend to require significantly more maintenance and repairs than professional or family rentals. Student tenants, particularly younger undergraduates, often have less regard for property upkeep, leading to excessive wear and tear.

From broken fixtures to damaged furniture and frequent appliance replacements, the repair bills can quickly pile up. These ongoing costs eat into profits, turning what looks like a high-yield investment on paper into a costly and time-consuming headache.

Hard to Fill Outside the Academic Cycle

Student rentals are highly seasonal. Most students secure housing for September, ahead of the academic year. If your property is not filled during this crucial period, it can be extremely difficult to find replacement tenants until the next academic cycle begins.

Unlike professional tenants, who move for work and lifestyle reasons year-round, students generally stick to term schedules. This can leave landlords with long void periods, meaning months of zero income while still covering mortgages, utilities, and maintenance.

Why Foot Forward Properties Avoids Student Tenants

At Foot Forward Properties, we have built our entire portfolio around professional HMOs, and for good reason. We have never taken on student tenants and never will.

The reasons are simple.

Student HMOs face declining demand due to falling university attendance, lower international student numbers, and students increasingly choosing to live at home.

They come with high upkeep costs and frequent repairs, which can erode profits.

They are vulnerable to course cancellations or campus closures, which can wipe out your entire tenant base overnight.

If a student HMO is not filled at the start of term, it is almost impossible to fill it mid-year, leading to long voids and financial losses.

We prefer professional HMOs because they offer consistent demand, reduced wear and tear, and year-round occupancy, all of which make them far more reliable and profitable for investors.

Why Professional HMOs Are a Better Choice

Professional HMOs cater to working adults, such as young professionals and key workers, who are seeking affordable, high-quality housing in shared accommodation. These tenants typically:

• Rent properties year-round, avoiding seasonal voids.

• Cause less wear and tear, reducing maintenance costs.

• Are less impacted by government policy changes, unlike international students.

• Provide a more stable and predictable income stream for landlords.

With rising private rental prices and soaring utility costs, many professionals are choosing all-inclusive HMOs, where they pay one fixed monthly rent that covers everything. This trend has created a booming demand for professional HMOs, making them the most profitable and secure property investment model in today’s market.

The Verdict: Are Student HMOs Worth It?

In today’s climate, student HMOs are no longer the dependable, high-yield investments they once were. Declining university enrolments, falling international student numbers, high upkeep costs, and the constant risk of long vacancy periods make them a risky and unreliable choice for landlords.

At Foot Forward Properties, we specialise exclusively in professional HMOs because they provide consistent demand, better-quality tenants, year-round occupancy, and higher net profits without the volatility of the student rental market.

If you want a property investment that delivers reliable returns and avoids the risks of student HMOs, contact us today. We can help you build a profitable, fully managed HMO portfolio that performs in any market.