UK higher education had 2,863,180 student enrolments in 2024/25 (HESA), and Knight Frank values the professionally managed student accommodation market at £84.8bn (2026). Investors committed £4.3bn to UK PBSA in 2025 across 79 deals (Knight Frank). Prime direct-let yields sit around 4.75% in London and 5.50 to 5.75% regionally (Knight Frank, Q2 2026), the CBRE UK PBSA Index returned 3.4% in the year to September 2025, and average rental growth slowed to 2% in 2025/26 from a peak of 8.3% (Knight Frank).
- Sector value£84.8bn (Knight Frank, 2026)
- HE student enrolments2,863,180 (HESA, 2024/25)
- PBSA investment, 2025£4.3bn, 79 deals (Knight Frank)
- PBSA investment, H1 2026£2.3bn (Knight Frank)
- Prime yield, Londonc.4.75% (Knight Frank, Q2 2026)
- Prime yield, regional5.50 to 5.75% (Knight Frank, Q2 2026)
- Total return3.4% (CBRE, year to Sep 2025)
- Rental growth2% (Knight Frank, 2025/26)
- New beds delivered, 202519,600 (Knight Frank)
- Beds under construction for 2026/27c.19,000 (Knight Frank, Q2 2026)
- As atSeptember 2026
How big is the UK student housing market?
How much capital is going into PBSA?
| Period | UK PBSA investment | Deals |
|---|---|---|
| 2024 | £3.87bn | 66 |
| 2025 | £4.3bn | 79 |
| Q1 2026 | £2.1bn | 20 |
| Q2 2026 | £164m | 13 |
| H1 2026 | £2.3bn | 33 |
What yields and returns does PBSA deliver?
| Measure | Figure | Source |
|---|---|---|
| Prime direct-let NIY, London | c.4.75% | Knight Frank, Q2 2026 |
| Prime direct-let NIY, regional | 5.50 to 5.75% | Knight Frank, Q2 2026 |
| Total return | 3.4% | CBRE UK PBSA Index, year to Sep 2025 |
| Income return | 5.4% | CBRE UK PBSA Index, year to Sep 2025 |
| Capital value change | -2.0% | CBRE UK PBSA Index, year to Sep 2025 |
Are student rents still rising?
Lenders read rent and occupancy as the income story behind a scheme. With rental growth back near inflation and incentives more common, the case for a facility rests on evidence that this building, in this location, will let at the assumed rent, not on a national growth figure. We structure the debt around that local evidence.
How much new supply is coming?
| Supply measure | Beds | Source |
|---|---|---|
| Delivered in 2025 | 19,600 | Knight Frank, Q4 2025 update |
| Under construction, all delivery years (early 2026) | 50,250 | Knight Frank, Q4 2025 update |
| Under construction for 2026/27 | c.19,000 | Knight Frank, Q2 2026 |
| Ten-year average annual delivery | c.21,000 | Knight Frank, Q2 2026 |
What it means for developers, operators and investors
- Developers: new delivery is running below its long-term rate, which supports well-located, consented schemes, but cities that took heavy supply in 2025 are seeing softer rents, so the lease-up case has to be local.
- Operators: university-operated and nomination-backed stock has held rent better than private direct let, which strengthens the income story a lender reads.
- Investors: returns are income-led while values have eased, so pricing turns on sustainable net income and the yield a buyer will accept for that location.
For the finance behind each of these positions, see student accommodation development finance for new schemes, stabilisation finance for buildings in lease-up, and PBSA investment loans for let assets. The H1 2026 city reports apply these figures town by town.
About these figures
Sources: HESA, UK higher education student numbers fall for second year in a row (January 2026); Knight Frank, UK Student Market Update Q1 2026 (May 2026); Knight Frank, PBSA investment hits £3.9bn (February 2025); Knight Frank, UK Student Market Update Q4 2025 (February 2026); Knight Frank, UK Student Market Update Q2 2026; CBRE, UK PBSA Index, year to September 2025; Knight Frank, UK Student Accommodation Outlook 2025/26; Unite Group, results for the year ended 31 December 2025 (February 2026).
Figures checked against their primary sources in September 2026. HESA figures cover all UK higher education enrolments, full and part time.
