As someone who has examined this in detail some time ago, the short answer is that I wouldn't recommend it unless
a) you buy an old wreck, and
b) you don't mind it wrecked some more
I have never come across anybody who has found otherwise.
Of course, what I call an "old wreck" may be many peoples' idea of a perfectly serviceable aircraft, and indeed most of UK's GA community have little choice but to fly these.
One example which worked for somebody was a PA28 Archer which was on permanent lease to a school, which was allowed to fall apart to the level where almost nothing apart from the altimeter (and other VFR-mandatory stuff) worked, but the owner had an agreement under which he was able to take it away for a few weeks each year for a holiday abroad and in this way he got a combination of cheap flying and the ability (not normally possible with self fly hire) to take it away for a few days or more.
Yes it needs to be a G-reg, maintained to Transport CofA standards, and insured for the ab initio training. You will no doubt want the school to cover it under its own insurance.
If you can afford your own plane, a much better way IMHO is to put together a small group of solvent people you know and trust, and either buy it together, or you buy it and rent it out to the others. If you don't insure it for ab initio (PPL) training and insist that everybody is legal on the type to start with, but the aircraft can be used for additional training like IMCR and IR, the insurance is pretty reasonable. Insurers don't like PPL training but are supportive of any additional training. This scheme (pure rental) can also have benefits on the VAT front, etc.
No matter what you do, you will never make money. There are too many people in the aviation training scene who are quick as foxes to exploit any opportunity to take advantage of a sucker. A properly managed, properly funded school will buy its own aircraft and maintain it to a decent standard.
But you can achieve cheaper flying for yourself.