The UK student housing market: what are the issues we want to examine further?

March 20, 2023


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The past two years have seen the UK dominate in terms of PBSA investment volumes across Europe, and it remains one of the largest destinations for international students in general. Yet, as a market that seems to have consistent developments in the student housing sector, the provision rate still remains at only one bed for three students in the country. This means the majority of students have no choice but to go into the wider private rented sector and this is entailed with its own number of challenges.  


The UK hit a record number of students in 2022, with study visa grants reaching nearly 490,000 in number, an 81% increase over pre-pandemic levels. As such, international student recruitment efforts still seem to be on full gear, yet this could be changing very soon due to the awareness regarding the lack of housing.

With the ever-increasing amount of international students, the 2023/24 academic year already seems like it will present huge challenges for those who haven’t already secured a place as almost all of the available accommodations have been booked since the beginning of the year [ICEF Monitor]. This is a struggle students should not have to face, as they are already understandably beset by the pressure of succeeding academically and most likely, being far away from home surrounded by unfamiliar peers. These reasons are why the shortfall of student beds is only becoming an increasingly dire issue.


Many members of the government have already expressed their concern with the large influx of students and have proposed restrictions [The Guardian], much to the dismay of leaders in higher education. These potential restrictions have been widely criticized as an unfavourable decision, as international students are integral for the economy and fulfilling the gap for skilled workers [The PIE News]. As such, most policymakers have decided to hold back on any rash decisions regarding incoming students and let universities continue their efforts relatively unabated.  


Still, it prompts the questioning back to the aforementioned lack of beds – where are all these students going to live?  


There is another issue. Even though demand for PBSA has only been getting higher, developments for new schemes seem to be experiencing some impediments. At The Class Foundation’s last regional forum in London, Cushman and Wakefield put light on some noticeable trends regarding the slowdown of new built PBSA across the UK market. This trend was forecasted to continue well into the future given concerns around inflation, unpredictable build and energy costs, and the issue of finding available land. In addition to this, planning policy is also sure to affect how freely new schemes can be built.  


That being said, we can round up the number of housing challenges currently facing the UK and what we should explore further as a sector as such: 

  1. The UK is facing a student housing shortage, which has been an ongoing issue for many years and is becoming increasingly urgent. 
  2. The shortage of student housing is impacting recruitment, retention, and reputation of universities, as well as students' mental health and well-being. 
  3. The problem of student housing is not limited to students but has wider implications for the local community and the economy. 
  4. The supply of new purpose-built student accommodation is slowing, which is exacerbating the problem, with various factors including inflation, costs of energy, and land availability. 
  5. While investors are keen to move into the student housing asset class, there are challenges to developing affordable student housing, including planning policy and regulations. 

These are all aspects that we hope to cover at our regional forum in London coming up on the 20th of April, and we will be able to see how the market has developed since last year’s event.

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