, Property
The six-bedroom house let every year for four years. In the fifth year, the group that viewed in November chose a purpose-built block instead, the two groups after them wanted five bedrooms not six, and by March the good tenants had all signed elsewhere. You let it in July to a group of three at a reduced rent. That single missed letting season cost more than any repair bill you have ever had.
Student property has the highest yields in most university towns for a reason. The market has one door, it opens once, and it closes.
The calendar is the business
A standard student tenancy runs for roughly 51 weeks from the summer, and it is agreed months before it starts. In most cities the letting season for the following academic year begins in the autumn term, peaks between November and February, and is largely over by Easter. Groups form, view together, and sign together.
This produces a market with almost no liquidity outside its season. A family let that falls vacant in April re-lets in May. A student house that is unlet in April re-lets the following year. There is no second chance, because there is no second cohort. The correct way to model a student property is therefore not weekly rent with an assumed void percentage. It is an annual binary: full, partially full, or empty, decided in February.
Everything else follows from that. Refurbishment happens in the summer window between tenancies, not when it suits you. Viewings happen while the current tenants are living there, in whatever state they keep it, which is why the condition of the house in January is a marketing asset. Rent reviews are set against what the competing houses on the same street advertised in November, not against inflation.
Joint and several liability, and the guarantor who actually pays
Most student houses are let on a single joint tenancy with all the sharers named. That makes them jointly and severally liable, which means each tenant is liable for the whole rent, not their share. If one of six stops paying, you can pursue any of the other five for the shortfall.
In practice you pursue the guarantors. Students have no income and no credit history, so a guarantee from a parent or another adult is the security. A guarantee is only worth what it says: it should be in writing, signed as a deed where it needs to survive, cover the whole rent rather than a share if the tenancy is joint and several, and make clear that it extends to any statutory periodic continuation. A guarantor form signed casually in a letting agent's office is often unenforceable in the way the landlord assumed.
The deposit is capped. The Tenant Fees Act 2019 limits a tenancy deposit to five weeks' rent where annual rent is under £50,000, and it must be protected in an authorised scheme with prescribed information served. You cannot take a larger deposit because there are six of them, and you cannot charge for referencing, inventories or renewals. The rules on what you may charge are narrow and the penalties for getting them wrong include repayment and a civil penalty.
The Renters' Rights Act 2025 changes the shape of student lets, since assured shorthold tenancies with fixed terms are being replaced by periodic tenancies. A specific possession ground exists for student housing let to full-time students where the landlord intends to re-let to students in the following cycle, which is the mechanism intended to preserve the annual cycle for HMOs. The conditions attached to it are precise, and commencement is by regulations, so check the current position before you write your tenancy agreements rather than after.
Licensing, and the council that has already decided
A property occupied by five or more people forming two or more households, sharing facilities, requires a mandatory HMO licence in England and Wales. That catches most student houses of five bedrooms and up. Licensing brings conditions on room sizes, amenity standards, fire detection, furniture and management, plus a fee per property and a licence period of up to five years.
Below five occupants, many councils operate additional licensing schemes covering smaller HMOs, and many university cities have Article 4 directions removing the permitted development right to convert a family house into a small HMO. In those wards, buying a three-bedroom terrace with the intention of letting it to students is a planning application, not a purchase decision, and the council's own policy may cap the proportion of HMOs within a given radius. Councils in Nottingham, Leeds, Manchester, Bristol and many others have operated such controls. Check the specific ward before you exchange, not after.
Operating an unlicensed HMO is an offence. It also exposes you to a rent repayment order through the First-tier Tribunal, under which tenants or the council can recover up to twelve months of rent paid. On a six-bed house that is a very large number.
Wear, turnover and the costs a family let does not have
Student houses are used harder and turned over annually. Budget for it honestly:
- A full clean, and often a repaint of high-traffic areas, every summer.
- Furniture replacement on a rolling cycle, all of it compliant with the Furniture and Furnishings (Fire) (Safety) Regulations 1988.
- Bills usually included in the rent, which transfers all energy price risk to you unless the agreement caps usage. A cold winter with a fair use clause you never enforce is a direct hit on margin.
- Broadband, which is now a letting requirement rather than an extra.
- Fire safety: interlinked detection, fire doors and emergency lighting in licensable HMOs, inspected and maintained.
- Full-time students are generally exempt from council tax, but a house with one non-student in it may not be, and an empty house over the summer between tenancies can attract a charge if the tenancy has ended.
Against that, gross yields on student HMOs are typically well above single-family lets in the same street, because you are selling rooms rather than a house. The net figure is what matters, and the gap between gross and net is wider here than in any other residential model.
The university is a counterparty you cannot negotiate with
The single largest risk in a student portfolio is not tenants. It is the institution. Universities change their intake, build their own accommodation, close courses, move campuses and lose international students when visa policy changes. Private providers build large blocks with gyms and cinema rooms, and those blocks compete directly with the tired six-bed terrace twenty minutes' walk away.
You cannot influence any of that, and the effect is concentrated. A city with one university and a new 800-bed block has a materially different market the following September. Before buying, look at the institution's published student numbers over several years, the accommodation pipeline in the local plan, and how far the property is from the actual teaching site rather than from the city centre. Location in student lettings means walking distance to lectures, and it does not move when the campus does.
Where this shows up in the game
Letting property arrives in Business Baron with the Property & Construction Track, an add-on to the full game. The fifty towns differ, and some are university cities where a third of the demand vanishes in June and comes back in September. A lettings business in one of them lives by that calendar, and a house that misses its season carries the cost for a year.