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Introduction
Over the last decade, student numbers in the UK have steadily increased. This has brought big changes to the student accommodation market, which has had to evolve to keep pace, creating new opportunities but also new pressures.
For the PBSA sector, understanding what’s driving student demand for beds and how it’s shifting is essential to making informed, forward-looking decisions.
A growing student population – but a changing one
According to HESA data, the UK student population has grown steadily, with a 16% increase in numbers between the 2019/20 and 2023/24 academic years alone. While some of this growth can be attributed to demographic trends - a higher birth rate and more 18-year-olds entering the system - it doesn’t tell the full story.
Cultural and behavioural shifts are just as important. The proportion of school leavers with graduate parents has increased, and this demographic is 72% more likely to attend university. Meanwhile, although Brexit led to a sharp decline in EU student numbers, this gap was filled by a surge in applications from non-EU countries, especially across Asia.
The most recent cycle we have full data for (2023/24) saw a slight dip in overall student numbers, influenced by a combination of policy changes (such as the Skilled Worker Visa reforms and the so-called "Dependents Ban" and macroeconomic factors, including currency fluctuations and economic downturns. But this appears to be a temporary pause - the latest UCAS data suggests applications are rising again for the 2025/26 cycle. Although it’s crucial to note that this is application data rather than enrolment, and only around half of international applications go through UCAS, it’s fair to assume this will translate into higher student numbers overall.
UK Student Numbers. Source: HESA data in StudentCrowd Analysis Tool
Understanding the demand for beds
Importantly, not every student entering higher education requires accommodation. The COVID-19 pandemic introduced more flexible learning models and made remote study more common, and these changes continue to this day.
Therefore, as student numbers rose post-COVID, so did the number of students not requiring accommodation. In 2022/23, we saw a significant spike in demand for accommodation, with 140,000 more students needing beds as restrictions eased and in-person learning returned. However, the number of students choosing to live at home also remains higher than pre-pandemic levels, suggesting some lasting behavioural changes.
Several reasons for this are commonly cited, including financial pressure, rising rents, and an increase in regional students commuting rather than relocating. This is a trend providers should take seriously. Research shows that commuter students are often less satisfied, face reduced progression, and achieve less academically, which, when your sector is judged on outcomes by a global audience, has significant implications.
Source: StudentCrowd. Analysis of lowest advertised rental price per person per week per building in the 24/25 booking cycle. For the purpose of this analysis, the booking cycle runs from 1st November to 31st October.
A persistent shortfall in supply
Although more students are now choosing to live at home, the majority continue to relocate for university, and, therefore, the demand for accommodation remains high.
Yet supply hasn’t kept pace. There are currently around 760,000 PBSA beds in the UK, serving a full-time student population of approximately 2.25 million. While universities provide a substantial share of student accommodation, the current split is approximately 40/60 in favour of the private sector, with PBSA driving much of the growth.
Moving forward, that proportion is expected to inrease, with financially stretched universities partnering with private operators to deliver new stock. And yet, even with the private sector’s growing contribution, a significant shortfall remains.
This is currently being met by HMO’s, although around 129,000 have exited the market, adding further pressure. Some of the gaps are also being filled by other asset classes, such as co-living and build-to-rent (BTR) schemes in the private rental sector, plus, as previously mentioned earlier, an increasing number of commuter students opting to live at home.
While new PBSA beds are in the pipeline, development is constrained by familiar barriers, including planning restrictions and competition for land. Of the 76,000 new beds approved to come online over the next 12 months, nearly half are concentrated in London, meaning other regions are set to remain critically underserved.
What this means for the sector: navigating the next decade
While demand for student accommodation remains strong overall, it varies significantly by location, making access to micro-level insights essential for effective planning and positioning.
At the same time, student preferences are evolving. There’s a growing appetite for schemes that offer flexibility, cater to a broader range of budgets, and deliver the lifestyle-driven experiences that both domestic and international audiences are seeking.
Additionally, new regulation is on the horizon in the form of the Renters Reform Bill. This is expected to bring significant changes to the wider rental market; however, PBSA is likely to be better placed than many private landlords to adapt quickly.
Taken together, these changes present an opportunity for the PBSA sector. There’s clear potential not only to develop new schemes, but to reposition existing assets to better reflect what students are actually looking for: affordability, experience and a sense of community.
The challenge is knowing where to act, and how. Where can value be unlocked in under-supplied regions? How do you balance rental growth with affordability? And how do you ensure your offer meets the expectations of an increasingly diverse student population?
The answer is insight. Operators that listen to students, act on real-time data, and position themselves around affordability and experience won’t just meet the demands of the next decade, but will come out ahead.
To learn more about StudentCrowd, visit our business website today.
