The UK lettings market has made a strong start to 2026. This momentum builds on a strong finish to last year. According to our latest Quarterly Insights (LQI) statistics, landlord confidence across the country remains steady, with instructions rising by 2%. Letting activity has also increased by 1%, while average rents have grown by 6%, highlighting the market’s continued resilience and upward trajectory.
For student landlords looking beyond the usual UK hotspots, the South Coast is quickly becoming a serious area of interest. Southampton and Portsmouth, especially Southsea, are standing out as two of the most compelling locations to invest in right now, each offering a slightly different but equally attractive proposition.
Southampton’s strength lies in its scale and diversity. Home to both the University of Southampton and Solent University, there is a large and consistent student population driving demand year after year. Although purpose-built accommodation has grown in recent years, there remains a clear and ongoing need for well-located HMOs and shared housing, particularly in established student areas. For landlords, this translates into reliable occupancy, steady rental growth, and a market supported by strong long-term fundamentals, including a growing local economy and excellent transport links.
Just along the coast, Portsmouth offers a more compact but highly efficient market. Centred around the University of Portsmouth, demand is concentrated and resilient. Southsea continues to perform exceptionally well thanks to its proximity to campus and strong lifestyle appeal. With a relatively limited supply of high-quality student housing, demand remains resilient, often resulting in strong rents, minimal void periods and impressive yields on well-configured HMOs.
Ultimately, the choice between the two comes down to investment strategy. Southampton offers scale, stability and long-term growth potential, while Portsmouth and Southsea provide a more focused, yield-driven opportunity. Both, however, remain standout options for student landlords looking to capitalise on the strength of the South Coast market.
To explore how these opportunities could work for you, get in touch with our expert team for tailored guidance and market insight.
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Source: Lomond Quarterly Insights: Winter Edition Q4 2025 YOY