January 5th, 2026, marked a pivotal moment for the Exeter property market. Planning approval was granted for the redevelopment of the former Heavitree Road police station site – unlocking over 800 new homes, studios, and co-living spaces in one of the city’s most strategic locations.
For investors, this isn’t just another housing project. It’s a high-visibility signal that:
- Demand is rising
- Professional rental demand is evolving
- And that Exeter is fast becoming one of Devon’s most investable urban locations
At Hunters Exeter, we’re already seeing investor appetite grow in the surrounding EX1 and EX2 postcodes. This post explains why the Heavitree transformation matters, what it means for yields, and how to move early before competition increases.
What is the Heavitree Road development?
The now-approved scheme will transform the former police station site into:
- Over 800 homes, studios and co-living spaces
- Ground-floor commercial and amenity space
- Landscaped courtyards, active travel links and green space
- A high-density, low-car housing model aimed at young professionals, students and key workers
Located along Heavitree Road in EX1, the site sits:
- Minutes from Exeter city centre
- Walking distance to Waitrose, hospitals and the University of Exeter
- On major bus and cycle routes
Why this project is a yield signal for investors
The Heavitree scheme reflects three important rental trends in 2026:
- Professional renters want more than a house-share The demand for studio flats, co-living, and furnished one-beds is outpacing traditional HMO demand in central Exeter.
- Public and private employers are expanding With growth in healthcare, tech, and education sectors, Exeter’s professional tenant base is growing year-round.
- Tenants prioritise location and lifestyle Proximity to work, green space and reliable transport is becoming more important than extra bedrooms.
The Heavitree scheme ticks all these boxes – and as it takes shape, demand for similar rental properties nearby will increase.
Exeter property investment 2026: the current snapshot
As of Q1 2026:
- Average house price: £325,000 (steady YOY)
- 1-bed flats (EX1): average £1,050pcm
- 2-bed terraces (EX2): £1,275–£1,400pcm
- Student HMOs (central): £300–£350pcm per room
- Typical gross yields: 5.5% to 7.2%, depending on condition and let type
The biggest rent increases this year have been in:
- Co-living and en-suite studio units
- Well-managed 2-bed houses near RD&E Hospital
- High-EPC homes with smart tech and inclusive bills
Why EX1 and EX2 are under the spotlight
EX1 (Heavitree, St Leonard’s, City Centre fringe)
- Proximity to Heavitree Road scheme = capital uplift potential
- High rental demand from hospital staff, lecturers, and young professionals
- 1- and 2-bed flats see very low voids and strong tenant retention
EX2 (St Thomas, Marsh Barton, Countess Wear)
- Excellent road links to the A30 and M5
- Offers more space and parking options
- Rents rising due to overspill demand from city centre
Investors purchasing in these areas now are positioned to benefit from:
- Pre-development pricing
- Early access to professional tenants moving in 2026–2027
- A longer growth window before yields compress
Co-living investment Devon: what’s driving interest?
Co-living spaces – where tenants rent an en-suite room with shared kitchen/living facilities – are emerging as the go-to model for:
- Young professionals priced out of city centre flats
- Remote workers wanting flexibility and community
- Employers offering short-term contracts to graduates
These units command rents of £700–£800pcm (all bills included), with:
- Lower management hassle than traditional HMOs
- Better compliance performance under 2026 standards
- Strong demand from both UK and international renters
The Heavitree development is Exeter’s biggest signal yet that co-living is a permanent fixture in its urban housing mix.
The 2026 compliance landscape: why management matters
With Renters’ Rights Act 2026 implementation now well underway, landlords must:
- Register properties on the new digital portal
- Meet strict rules around repair timelines and documentation
- Prepare for the removal of Section 21 and updated eviction routes
At Hunters Exeter, our full management service ensures landlords:
- Stay compliant without chasing legislation
- Avoid fines and missed paperwork
- Benefit from lower voids and better tenant communication
Explore our lettings and management support
What we expect in the next 12 months
With the Heavitree Road green light now official, we anticipate:
- Land values in EX1 to rise by 3% to 5% in 2026
- Rental demand in nearby streets to intensify as construction begins
- An influx of institutional investors seeking blocks and portfolios
- Smaller investors shifting focus from traditional student lets to professional-ready single lets and studios
What smart landlords are doing now
Whether you already own in Exeter or are looking to enter the market, now is the time to:
- Assess your portfolio’s location fit
- Are you positioned near transport, hospitals, or city centre growth?
- Could you achieve stronger returns by shifting into EX1 or EX2?
- Review your property spec
- Is your EPC at least a C?
- Could you convert a large HMO into co-living with better margins?
- Time your investment
- Properties purchased before Q3 2026 will benefit from “first wave” tenants drawn to Heavitree’s transformation
- Partner with a local expert
- We help landlords source off-market opportunities and reposition properties for long-term yield
Final word: Exeter is no longer a sleeper city
The Heavitree Road regeneration isn’t just a boost for the neighbourhood – it’s a declaration that Exeter is building for growth.
In a market where lifestyle, connectivity and tenant expectations are shifting fast, this 800-home scheme is the kind of flagship project that resets values across the board.
Act early, and you could:
- Lock in rising rents before completion
- Capture capital growth in an underpriced zone
- Secure tenancies from a new generation of renters
At Hunters Exeter, we know the rental market street by street. Whether you’re buying your first investment or expanding a multi-property portfolio, we’ll help you move with confidence.
