Report finds investors committed £4.3bn to student housing market in 2025

A total of 37 single schemes were sold, accounting for the largest share of investor activity in 2025 and consistent with long-term trends.

In total, 13 portfolios were traded, including five that transacted for more than £200m.

Funding deals and joint ventures accounted for 16 of the 79 total transactions, while land sales dropped to 13 transactions. A tougher development landscape affecting investment was driven by significant Gateway 2 approval delays at the Building Safety Regulator, alongside planning and viability challenges.

A total of 19,600 new PBSA beds were built across 64 schemes in 2025, representing a 20% increase on the previous year. However, this remains short of the five-year pre-pandemic annual average of more than 25,000 beds.

London had the highest number of new beds built at 4,350, followed by Nottingham at 2,550, and Leeds at 1,900.

The private sector accounted for 90% of all new beds completed last year, playing the leading role in providing new accommodation for students.

A total of 50,250 PBSA beds were under construction across the UK, with the largest numbers including in London at 14,600, Bristol at 5,000, Glasgow at 4,300, Coventry at 3,600 and Manchester at 3,500. Together, this accounted for 62% of all development activity across the UK.

According to UCAS data, for the 2025-26 academic cycle, the number of undergraduate students accepted onto university courses in the UK went up by 2.3% year-on-year, totalling to 577,725 students.

The number of international student acceptances climbed nearly 8% in the year, while domestic student numbers were up 2%.

Accepted applicants to Russell Group universities rose by 9% in 2025 and are up 18% since 2023. International student acceptances at Russell Group universities increased 11% year-on-year and 14% since 2023.

For the 2026-27 academic year, 619,360 applications were made to UK universities – up 3% from last year.

Domestic students made up 494,540 of these applications, up 3% year-on-year. International students accounted for 124,830 of these applications, up 5% year-on-year.

A total of 43% of all UK undergraduate applications were for higher tariff universities, compared to 39% in 2019.

Applications from Chinese students went up 10% from last year, equivalent to an increase of 3,220 applicants. This shines a light on the growing reliance on China as an international student market; it now accounts for 28% of all international applicants, compared to 15% in 2019.

But applications from students intending to live at home for the upcoming academic year rose to 33%, raising wider affordability concerns and fitting with the rise of the commuter student in some locations.

Following the visa dependent rule change in January 2024, international postgraduate numbers fell by 11% year-on-year in 2024-25.

For the same year, the largest non-UK postgraduate markets included India at 97,394, which fell by 16%; China at 79,772, which fell by 4%; and Pakistan at 30,696, which rose by 5%.

The number of postgraduate students from Nepal in the 2024-25 academic year increased by 50% year-on-year to just over 7,000. This is largely linked to changes in international visa policy in competing postgraduate destinations, including Australia and Canada.

Mid-tier universities stand to gain the most as the UK government has confirmed that it will join the Erasmus+ student exchange programme in 2027. The deal allows students to study or work in the UK or Europe for two to 12 months without extra tuition fees, reversing the post-Brexit suspension.

At the programme’s peak, approximately 17,900 students came to the UK and 9,500 left, leaving a net positive figure of around 8,400 students in the UK requiring accommodation.

Given the shorter duration of Erasmus+ exchanges compared with full-degree enrolments, the financial impact is expected to be limited.

The report also said that the private direct-let PBSA market remains highly concentrated, with around 40% of schemes controlled by just nine investors and the remainder fragmented and fiercely competitive for scale.

In 2026, it is expected that investment will chase expansion. This will be focused on plug-and-play ability across platforms; composition strength with a preference for 100% Russell Group exposure and manageable scheme sizes of 400-500 beds; middle-market product offering, appealing to both domestic and international students; and risk-adjusted returns.