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A total of 33,583 purpose-built student accommodation (PBSA) beds (2018: 32,652) have now been added to the market in time for the 2019-20 academic year, the highest on record.
This represents year-on-year growth of 5.2%, compared to an increase of 5.3% reported a year earlier. Of those beds added so far, 81% are privately managed, highlighting how the makeup of supply is changing as it becomes a more mature asset class.
The location with the greatest number of new beds is Liverpool at 3,488, followed by Sheffield at 2,988. On a percentage basis, Bournemouth has recorded year-on-year growth of 28%, whilst Swansea has seen PBSA increase by 21%.
Whether these additional beds can be absorbed depends on local market fundamentals. In the example of Sheffield, once the HMO market is accounted for, which still equates to 47% of all beds, supply is expected to grow by 8% (PBSA growth of 12%) in 2019. This compares to an increase in full-time students of 1.4% in 2017 and a decline in total acceptances of 5.8% in 2018.
Therefore, unless the pace of growth in demand has increased since 2017, new supply will be outstripping demand for beds, resulting in a deterioration of fundamentals.
What is apparent from this simplistic example is that headline figures hide the intricacies of local markets. This is already apparent from both anecdotal reports and our own data showing that some locations are becoming increasingly oversupplied.
Figure 1: PBSA Growth by Location
Source: StuRents.com
StuRents lists in excess of 750,000 student beds nationwide, covering both the HMO and PBSA sector. To understand more about our market-leading insights and data services visit: StuRents.com/student-property-research
