"Looking forward, even under an extremely unlikely zero-demand growth scenario, student demand will continue to significantly outstrip supply by 2030"
- David Feeney - Cushman & Wakefield
The latest UK Student Accommodation Report from Cushman & Wakefield raises concerns about the financial sustainability of building student housing, revealing a growing disconnect between rising demand and pockets of underoccupancy across the UK.
Although the national student-to-bed ratio (SBR) stands at more than two students per available purpose-built student accommodation (PBSA) bed, affordability issues and declining international postgraduate numbers have created underoccupied schemes in some regions.
The report cites Sheffield as a key example, where the demand pool is estimated to have dropped by 17.3% between 2022/23 and 2024/25. The city’s student-to-bed ratio has fallen from 1.46:1 to 1.21:1 — a level Cushman & Wakefield describes as unprecedented in a major market. This shift has resulted in the UK’s largest decrease in PBSA rents this year at -5.5%. The firm notes, however, that large PBSA markets such as Sheffield often demonstrate cyclical trends and may recover over time.
The imbalance between overall undersupply and localised underoccupancy suggests affordability constraints are shaping where students choose to live. University rents grew by 4.44% in the last academic year, outpacing private sector growth of 1.16% for the first time in seven years. It was also only the third time in 12 years that lower-quality accommodation saw faster rent increases than higher-end properties.
“Unfilled beds are a concern,” said David Feeney, partner in Cushman & Wakefield’s UK Student Accommodation team. “We project that postgraduate numbers have fallen by over 17% over the last two years, and whilst international student numbers are likely to stabilise after these initial visa shockwaves, we’re also seeing a rise in commuting students or those living at home because the cost of accommodation is simply too high for many."
"Meanwhile, stock at the same quality levels is competing for the PBSA student body, where en-suite cluster accommodation will lose out if the price point hits above affordability limits. Overall, in the post-COVID world, many students are balancing lifestyle and value-for-money when considering accommodation location.”
The report finds that the least-occupied en-suite schemes this year were priced at 110% of the maximum maintenance loan, compared with 95% for the best-occupied schemes. Across England, including London, a record 23% of PBSA beds now exceed the maximum maintenance loan amount. In some markets, more than two-thirds of students can still find accommodation below that threshold, but in others, only around 12% can.
Providers continue to face wider economic and construction challenges, with the Building Safety Act and inflationary pressures pushing up costs. As a result, rents have increased, but fewer developments are proceeding. Only around 20% of the current PBSA pipeline is under construction, with viability requiring a blended rent of about £265 per week. Cushman & Wakefield expects growth to remain steady but subdued compared with pre-pandemic levels.
This year saw just 18,200 new student beds added to the market, representing a net increase of 10,000, which is still significantly below historical delivery rates. Over the last five years, 88,000 beds have been delivered across the UK, compared with 158,000 in the previous five-year period, a fall in average annual delivery from 31,600 to 17,600 beds.
Investor opportunity markets
Despite affordability and construction challenges, structural undersupply continues to support the investment case for PBSA. If accommodation demand rises by just 1% annually over the next five years, less than half the rate of the previous decade, almost 750,000 students would still be unable to secure PBSA beds, resulting in an SBR of 1.90:1.
“Whilst markets don’t like uncertainty, investors still see huge opportunity in a number of undersupplied locations across the pricing spectrum, provided value-for-money and a good student experience is delivered,” explained Feeney. “‘Know your market’ is a truer sentiment now than ever before.
"Overall, the report signals that the purpose-built student accommodation sector remains a robust, defensive asset class for investment, supported by strong demand and supply fundamentals. Looking forward, even under an extremely unlikely zero-demand growth scenario, student demand will continue to significantly outstrip supply by 2030. Needless to say, the UK is one of the top higher-educational destinations, with four institutions in the global top 10.”
Regional markets
According to Cushman & Wakefield, 27 markets recorded new bed deliveries this year, but London, Nottingham, and Leeds accounted for nearly half of all additions, reflecting a concentration of investor focus in the most viable areas.
Nottingham has emerged as the UK’s second-largest PBSA market, with a 35% increase in supply. The city delivered 2,593 new beds in 2025/26, following London’s 3,775. Leeds (1,979) and Bristol (1,304) ranked third and fourth, respectively. Several major university cities, however, saw no new completions.
Leeds has experienced rapid changes in market dynamics due to policy and demand shifts. The report estimates a 7.2% drop in demand between 2022/23 and 2024/25, alongside a 21.3% increase in PBSA supply. This year marked the city’s highest annual bed delivery in five years, with a further 8,700 proposed and 6,300 already consented. The entry of build-to-rent (BTR) schemes targeting students may also increase competition, particularly as much of the new stock lacks price and quality diversity.
Manchester, while more expensive than five years ago, continues to perform strongly due to a reduction in available beds and sustained demand. London, meanwhile, surpassed its London Plan target for the first time, delivering more than 3,500 new beds in a single year.
“Viability issues and risk aversion mean developers are now focusing on a limited number of ‘premium’ locations,” added Feeney. “The potential for growth and weight of the development pipeline varies significantly from market to market."
"Our analysis shows that student-to-bed ratios are set to fall in half of the 14 largest locations over coming years. We have moved on from the arms race seen a few years ago of developing the best accommodation with the best amenity spaces, and the fear of not meeting that expectation. Today, our data indicates that value-for-money concerns mean quality, at least in the mid-market, is no longer the determining factor.”
