The rental guarantor provider has identified potential affordability challenges in the student accommodation market, along with the upcoming Renters Rights Act, as inspiring caution in the sector.

Specifically, Housing Hand has flagged overall demand among students as declining this year by around 1-2% according to internal data. The demand for PBSAs has been greater at around 7-8% lower.

According to Housing Hand, pricing models are at the heart of this, with PBSA prices felt by some to have hit peaks in several key university cities.

The Renters Rights Act, which is due to come into force from 1st May 2026, has also been identified by the guarantor as impacting the sector and specifically HMOs.

From that data, HMO landlords won’t be permitted to sell tenancies until six months before the start date. While this won’t impact the 2026/27 academic year, it will be felt looking ahead to the 2027/28 booking season.

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Any student wanting to secure a home more than six months in advance will have to turn to PBSA instead, where they could face price peaks.

As HMO investors prepare for this significant market shift, Housing Hand predicts a year of consolidations, with larger HMO owners using the opportunity for strategic growth and absorbing smaller providers as they do so.

An influx of institutional investors is also anticipated, with the potential that this type of professionalisation of the subsector will drive up rents.

“From an investment perspective, certainty is good, so the fact that the Renters’ Rights Act has received royal assent is a positive step forward,” said Jeremy Robinson, group founder and CEO at Housing Hand.

“However, major regulatory change of this nature demands careful consideration if investors are to navigate it successfully.

“Add to that the market and pricing shifts we’ve observed over the past year, and the stage is set for a testing 2026.”