Balancing affordability and rising costs crucial for PBSA

Property Week reports that higher construction costs and rising demand are driving up prices in the purpose-built student accommodation (PBSA) sector. 

A recent study from Unipol found that student rent has increased by 14.6% in the last two years, and accommodation costs now consume nearly all of the average £7,590 maintenance loan received by university students in England.

However, PBSA developers are continuing to face increasing overheads due to higher inflation and construction costs. There are now questions over how to deliver the quantity of accommodation needed at prices students can afford.

The demand for higher education is continuing to grow, with UCAS projecting up to one million applicants in 2030. However, the supply of student accommodation is failing to keep pace with demand. StuRents estimates that 12,000 PBSA beds are due to be delivered in 2023, around two-thirds lower than the 36,000 beds delivered in 2019. 

Affordability is becoming an increasing issue in the PBSA market. Planners, universities, developers and operators will need to think creatively about how to tackle the issue. Options like offering shared university rooms, and renting out student accommodation to the open market during holidays are on the table, but will require careful planning and messaging to see success.

Find out more on Property Week.