X
X
Where did you hear about us?
The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

PBSA Shortages Forecast to Hit 29,000 in 2023

Demand for purpose-built student accommodation (PBSA) has begun to outstrip the supply, and in 2023 the UK will face a shortfall of circa 29,000 beds, according to the latest data from StuRents.

The company has redefined “demand for PBSA” to deliver more accurate findings. Rather than looking at total number of students per bed – as most data sets do – it has focused solely on what it has called “core demand” for PBSA i.e., students who are likely to opt for PBSA over HMOs.

This includes all first-year students living away from home, plus second and third-year international students and international postgraduates. StuRents then looked at how the levels of this core demand have changed over time against changes to PBSA supply in the 30 largest universities towns and cities outside of London.

It found that, between the 2017-18 and 2020-21 academic years, PBSA supply in the UK exceeded core demand, which meant providers were partially reliant on 2nd and 3rd-year domestic students, who would be more likely to rent an HMO. That trend has since reversed and the gap between PBSA core demand and supply looks set to continue growing.

However, StuRents also found numerous regional differences, with some cities such as Leeds and Sheffield still facing an oversupply of PBSA relative to this core demand.

Richard Ward, head of research at StuRents, said: “Historically, the PBSA sector used student-to-bed ratios or headroom analysis to understand if the location needs more accommodation or not. However, these metrics do not necessarily take into account the nuances of the market. And, for the most part, they ignore the critical role that HMOs play in accommodating students. Assuming that all domestic students want to and can afford to live in PBSA will cause investors and developers to draw misleading conclusions. Making investment decisions based on total student demand rather than “core PBSA demand” means you will be relying on second-year and third-year domestic students – who are more likely to be considering HMOs – to fill beds.”

Want the full article?

subscribe