The UK purpose-built student accommodation sector (PBSA) has grown by a net increase of 2.6% in 2020, with more than 25,000 new beds coming to the UK market, research by StuRents has revealed.

According to the student accommodation search platform, the number of private PBSA beds on offer has now surpassed university-supplied accommodation for the first time, despite challenging economic and social conditions.

Its resilience is buoyed by the continued demand for student accommodation across the UK. Data from UCAS showed a record-breaking 40% of 18-year-olds in the UK submitted an application to study at UK universities this year.

The appeal of UK universities to international students outside of the EU also isn’t abating, resulting in an 8.8% rise in acceptances compared to 2019.

However, student demand has been skewed towards higher tariff Higher Education Institutions (HEIs) – yearly acceptances up 12.1% compared to 2010 versus 1.3% for medium and 0.3% for lower tariff institutions – resulting in a disparity between the best and worst-performing institutions.

StuRents estimates that approximately 48,000 students in Sheffield require accommodation in 2020, whilst fewer than 30,000 PBSA beds are on offer. However, the market has reported growth in PBSA between 2017 and 2020 of almost 7,500 beds – far outstripping growth in demand and resulting in ‘deterioration’ of the supply and demand fundamentals.

Conversely, demand for student beds in Leeds increased more than 5,000 over the same period, while the supply of PBSA increased by aroujnd 3,100, presenting much more favourable fundamentals for investors.

The research also revealed that, despite investment into the sector, houses in multiple occupation (HMOs) still dominate the student accommodation market – equating to at least 55% of all beds – with average advertised rents increasing by 3.5% to £101 per person per week in 2020. In the PBSA sector, rents rose by 2.1% to £175 per person per week.

StuRents head of research Richard Ward, comments: “The HMO market has been largely insulated from the pandemic due to its early lettings cycle, whilst UK PBSA has faced challenges due to travel restrictions and the uncertain conditions facing students due to Covid-19.”

“However, as shown by the last recession, demand is likely to remain strong as students look to invest more and more in their education when faced with a difficult jobs market. Yet, with demand greater for higher tariff institutions, we are seeing a widening multi-tiered market and thus investors’ interests are still being piqued by the very best locations at renowned institutions.”

He adds: “Nevertheless, the suitability of an investment should not hinge on broad market analysis or institutional reputation alone, with sophisticated investors starting to realise they must evaluate the granular, local conditions to ensure an appropriate product fit, rather than relying on national trends.”