A new report casts doubt on the economic viability of Purpose Built Student Accommodation.

Property consultancy Cushman & Wakefield’s latest UK Student Accommodation Report says the despite the national student-to-bed ratio (SBR) standing at over two students for every available PBSA bed, pockets of underoccupancy are evident as the market faces falling international postgraduate demand and affordability issues. 

The firm highlights Sheffield, where demand is projected to have fallen by 17.3% between 2022/23 and 2024/25, resulting in a student to bed ratio of 1.21:1, down from 1.46:1. Cushman & Wakefield comments that such a ratio is unprecedented in a major market, and has resulted in the largest decrease in PBSA rents in the UK this year, at -5.5%.

The report also notes the cyclical nature of large PBSA markets, like Sheffield, which have trended towards recovery from dips over time.

The juxtaposition of overall structural undersupply against underoccupancy points to affordability constraints impacting student living decisions. In the latest academic year, analysis shows university rental growth outpaced the private sector for the first time in seven years, growing by 4.44% – nearly four times greater than the private sector’s rental growth at 1.16%.

For only the third time in 12 years, the lowest quality accommodation delivered rental increases above those of the highest quality beds. 

A Cushman & Wakefield spokesperson says: “Unfilled beds is a concern. 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.”

Cushman & Wakefield’s report indicates that the most poorly occupied en-suite developments this year were priced at 110% of the maximum Maintenance Loan, compared with 95% for the best occupied schemes.

What’s more, average annual rents now take up more of the Student Maintenance Loan than ever, with a record 23% of beds in England (including London) costing above the maximum loan. Whilst in some major markets, over two-thirds of all students with a requirement for a bed can secure one under the maximum Maintenance Loan rate, in other markets this figure falls to as low as 12%.

Furthermore, just 18,200 new beds entered the market this year, a net increase of 10,000, yet still far below pre-pandemic levels. Over the last five years, an accumulative total of 88,000 beds has been delivered nationally versus the 158,000 in the previous five years, which is a fall in delivery annually from an average of 31,600 new beds a year to 17,600, according to the report.

Overall, problems of structural undersupply continue to underpin a significant proportion of the market, keeping the PBSA investment market outlook buoyant despite macroeconomic factors.

In terms of market trajectory, if the next five years sees demand for accommodation grow at 1% per year, which is less than half the rate seen over the last decade, the number of students requiring but unable to secure a bed in PBSA would still stand at close to 750,000 (a student to bed ratio of 1.9:1).

Whilst 27 different markets have seen new beds, the report highlights that just three markets make up nearly half of all new beds (London, Nottingham and Leeds), demonstrating investor focus is limited to major markets where development viability can be delivered. 

The last five years has seen the emergence of Nottingham as the second largest PBSA market in the UK, with a staggering 35% increase in supply. In 2025/26 it saw 2,593 new student beds delivered, second after London’s 3,775. Leeds (1,979) and Bristol (1,304) follow as the third and fourth highest university cities for new accommodation this year. A number of other major markets have seen no new deliveries.

Cushman & Wakefield highlight Leeds as a city of changing market dynamics in a short period of time as a result of policy impacts and demand changes.

It projects the demand pool fell by 7.2% between 2022/23 and 2024/25 against a 21.3% increase in PBSA. This year saw the highest annual delivery for new beds in Leeds in five years. With a further 8,700 beds proposed and 6,300 already consented in the city, alongside the arrival of Build-to-Rent (BTR) schemes targeting student renters, the Leeds PBSA market risks oversupply, especially with the lack of pricing and quality diversity in terms of rental new supply.

Manchester, whilst an expensive market in comparison to five years ago, is still performing well due to a net loss in beds over the last five years, with demand remaining high.

Significantly, for the first time since its introduction, London has exceeded the London Plan’s 3,500 beds-per-year target.