Over the past decade, investors have committed nearly £50bn to UK purpose-built student accommodation (PBSA), underscoring the sector's appeal and resilience, according to a report from Knight Frank.

CGI of Landmark’s Queensgate PBSA scheme, Birmingham. Plans were submitted last month

Its latest UK Student Accommodation Outlook for 2025-26 revealed that the UK has accounted for 33% of all global PBSA investment since 2019, largely driven by big-ticket sales of operating platforms.

However, it added that 22% of all UK PBSA investment over the period has been on land assets or forward funding and joint ventures.

The report revealed that investment in the first nine months of 2025 stands at £3.4bn, up 3% on the same period last year.

It added that in Q3 2025, UK PBSA investment was the third largest figure on record, at £1.83bn.

The Student Property Rental Index also showed average rental growth for all room types across the UK slowed to 2% in 2025-26, with university rental growth of 4.8% outperforming the 0.3% recorded in the private direct let sector.

Knight Frank said student housing returns “remain resilient, outperforming most UK sectors over three, five and 10-year horizons – second only to industrial in the long run”.

It added that despite the operational intensity of PBSA assets, market maturity and a breadth of management platforms “enable institutional entry and de-risked operations”.

The update added: “In 2025, the market looks markedly different from 2015. What was once a developing niche has evolved into a mature, multi-faceted market. With participation growing beyond traditional investors, the market is now rich in both liquidity and nuance.

“Appetite remains strongest for first-generation standing stock – especially where there is potential to deliver value-add returns – but fire safety requirements, remediation work and a later leasing cycle are all contributing to delays.”

The report added that while “historic growth has been underpinned by a persistent demand-supply imbalance, forward-looking factors, such as geopolitical risk, affordability and occupancy challenges, and the ‘mid-market’ opportunity, will shape performance in the next cycle”.

Last week, Valpre Capital and Katch Investment Group launched a £500m joint venture to develop PBSA schemes with 1,500 beds across the UK.