The Subplot: Delivery of PBSA has slowed in recent years, says StuRents

In The Subplot's latest edition, student housing development faces challenges and prospects are examined, with StuRents offering exclusive insights. While investors have shown interest in Purpose-Built Student Accommodation (PBSA) due to assured long-term income, the supply side is facing inflationary pressure. StuRents shares data indicating a sharp decline in planning applications for new student housing developments, down 33% year-on-year in Q1 2023. Demographics indicate increasing demand for PBSA, yet the supply of alternatives is diminishing, leading to record-high occupancy levels and rental growth.

Richard Ward, Head of Research at StuRents, says: “Due to construction industry constraints and interest rate hikes, delivery of PBSA has slowed in recent years.”

However, the article highlights two potential factors impacting future investments. Firstly, the anticipated decline in the 18-year-old population post-2030 may lead to cautious investor behavior. Secondly, uncertainty surrounding overseas investment due to inflation, interest rates, and recessionary risks may delay capital inflow until closer to 2026/2027.

While rents are expected to keep rising due to supply-side inflation, the student housing market presents both challenges and opportunities.

Read the full report on The Subplot.