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UK: Knight Frank’s latest Student Market Update for Q4 2025 shows that purpose-built student accommodation (PBSA) investment for the year reached £4.3 billion, up 10 per cent from 2024.
Investment reached just under £880 million on UK PBSA in the Q4 2025, taking full‑year investment to £4.3 billion, slightly below the long‑run 10‑year average of £4.5 billion.
A total of 79 deals completed over the course of the year, a 20 per cent increase on 2024. Single-asset operational stock accounted for the largest share of investor activity in line with long‑term market trends, while 2025 also saw a resurgence in portfolio‑level transactions and launches – 13 portfolios traded, including five transactions over £200 million, highlighting investor’s appetite for scale.
Developers delivered 19,600 new PBSA beds across 64 schemes in 2025, a 20 per cent year-on-year rise, though still below the five‑year pre-pandemic annual average of around 25,000 beds.
London recorded the highest level of new delivery with 4,350 beds, followed by Nottingham (2,550) and Leeds (1,900). A further 50,250 beds are currently under construction across the UK.
As of the January UCAS deadline, UK universities received a record 619,360 applications for the 2026/27 academic year, up three per cent on last year. UK students accounted for 494,540 applications (up three per cent YoY), while international applications reached 124,830 (up five per cent YoY). Knight Franks says the data “underscores a clear flight to quality from students”, with 43 per cent of undergraduate applications directed to higher‑tariff universities, compared with 39 per cent in 2019.
On an annual basis, applications rose six per cent to higher‑tariff universities, one per cent to middle‑tariff institutions, and fell one per cent to lower‑tariff providers.
Merelina Sykes, joint head of student property at Knight Frank, said: “The PBSA sector continues to be an attractive asset class, and investment volumes in 2025 were supported by the return of portfolio‑level transactions, with core‑plus and value‑add investors increasingly focused on scale. But with operational opportunities finite, investors have explored alternative deployment routes, with a record number of funding deals and joint ventures taking place. The development landscape remains challenging with delays at the Building Safety Regulator due to Gateway 2, alongside planning and viability constraints – though there are signs these roadblocks are slowly easing.”
Katie O’Neill, associate in global living sectors research at Knight Frank, added: “While the sector continues to attract significant capital and benefit from strong underlying demand, the investment environment remains far from straightforward. Headline activity masks a market where deal timelines have prolonged due to pricing misalignments between vendors and purchasers, alongside challenging leasing conditions in some locations. Assets in Russell Group cities – or portfolios offering genuine value‑add opportunities through cap‑ex programmes – remain the first choice for investors. Yet, an attractive 10‑year Gilt environment and share price declines among publicly listed sector participants have put returns into perspective for investors.”
Highlights:
- Knight Frank’s latest Student Market Update for Q4 2025 shows that investment for the year reached £4.3 billion, up 10 per cent from 2024
- A total of 79 deals completed over the course of the year, a 20 per cent increase on 2024
- Single-asset operational stock accounted for the largest share of investor activity in line with long‑term market trends, while 2025 also saw a resurgence in portfolio‑level transactions and launches
- Developers delivered 19,600 new PBSA beds across 64 schemes in 2025, a 20 per cent year-on-year rise, though still below the five‑year pre-pandemic annual average of around 25,000 beds
