Investment activity in the purpose-built student accommodation (PBSA) sector hit a record high in Q3 2025, according to Knight Frank’s latest UK Student Accommodation Outlook report.

In Q3, £1.83bn transacted – the highest Q3 volume on record – and year-to-date investment now stands at approximately £3.4bn, a 3% increase compared with the same period in 2024.

Single asset operational stock accounted for the largest share of investor activity so far this year, with 27 assets sold. However, there has also been a resurgence in portfolio transactions, with eight portfolios trading in the year-to-date.

Average rental growth across all room types slowed to 2% in 2025/26, down from a peak of 8.3%. This moderation signals a return to long-term trends of 2%–3% annual growth, aligning with CPI targets and reflecting a more price-sensitive student base, according to Knight Frank.

Merelina Sykes, joint head of student property at Knight Frank, said: “While the headline figures point to a liquid market, the underlying dynamics reveal a more complex picture, with transaction timelines having lengthened in some cases. Investors have a clear appetite for first-generation standing stock with value-add potential – though fire safety remediation, leasing cycle delays, and operational complexities have contributed to slower deal times.”

Katie O’Neill, from the global living sectors research team at Knight Frank, added: “For the first time in our rental index, university operated accommodation outperformed private PBSA. University owned stock saw rents rise by 4.8%, compared to just 0.3% for private direct-let assets. While it is true that some trends of weaker occupancy emerged again this year, other factors – outside of the real rental levels – that are impacting lease up and retention include brand loyalty and hands on asset management.”