Pockets of empty purpose-built student accommodation (PBSA) rooms are popping up across Britain, even as the country grapples with a growing shortage of student homes, research reveals.
The situation stems from high rents putting off many undergraduates, the study from property experts Cushman & Wakefield found.
Its latest UK Student Accommodation Report reveals a market caught between undersupply and affordability barriers, where some new developments risk standing half empty even as demand remains strong nationwide.
The firm warns that the economics of building and operating PBSA are becoming increasingly challenging.
Value-for-money consideration
A partner in the firm's UK Student Accommodation team, David Feeney, said: "Unfilled beds is a concern.
"We project that postgraduate numbers have fallen by over 17% over the last two years, and whilst international student numbers are likely to stabilise after these initial visa shockwaves, we're also seeing a rise in commuting students or those living at home because the cost of accommodation is simply too high for many."
He added: "Meanwhile, stock at the same quality levels is competing for the PBSA student body, where en-suite cluster accommodation will lose out if the price point hits above affordability limits.
"Overall, in the post-Covid world, many students are balancing lifestyle and value-for-money when considering accommodation location."
PBSA vacancies grow
Although the student-to-bed ratio is more than two students for every available PBSA bed, several cities are now seeing vacancies for the first time in years.
The report points to Sheffield as a clear example of this as its student demand pool fell by more than 17% between 2022/23 and 2024/25 and its student-to-bed ratio dropped to just 1.21:1.
Cushman & Wakefield says this level of oversupply is unprecedented for a leading university city which saw Sheffield seeing the steepest fall at 5.5% in PBSA rents this year.
The report found student markets typically recover over time, but for now they reflect a clear shift in affordability and student decision-making.
Cheaper student rents rise
The study also found that university-managed rents rose by 4.44% in the last academic year, almost four times faster than the private sector's increase of 1.16%.
It also noted that cheaper student accommodation recorded faster rent growth than the most expensive properties, for the third time in 12 years, underlining the squeeze faced by students on limited budgets.
The report shows a stark link between rent levels and occupancy, with the least occupied en-suite rooms costing 110% of the student’s maximum maintenance loan, compared with 95% for the better performing schemes.
Across England, almost a quarter of all student beds now cost more than the maximum maintenance loan, the highest share on record.
In some areas, only 12% of students will find housing within their loan budget.
PBSA looking at oversupply
Developers are struggling with escalating costs driven by the Building Safety Act, construction inflation, and tighter margins.
Cushman & Wakefield estimates that fewer than one in five PBSA schemes currently being planned have broken ground, with viable projects needing average weekly rents of £265 to make financial sense.
The report also says that fresh PBSA bed supply has also slowed significantly with only 88,000 beds being delivered over the past five years, down from 158,000 over the preceding five.
In most places, demand still exceeds supply, and the company predicts that by 2030, nearly three-quarters of a million students won't find a PBSA bed if enrolment grows by just 1% annually over the next five years.
That would be half the growth seen in the previous 10 years.
Three cities account for half of new builds
While 27 university towns and cities saw new developments this year, three locations, London, Nottingham and Leeds, accounted for almost half of all new beds.
Nottingham is the UK's second largest PBSA market, expanding its stock by 35% in just five years.
This year, the city saw 2,593 new beds completed, second only to London's 3,775, with Leeds and Bristol following behind.
Mr Feeney said: "We have moved on from the arms race seen a few years ago of developing the best accommodation with the best amenity spaces, and the fear of not meeting that expectation.
"Today, our data indicates that value for money concerns mean quality, at least in the mid-market, is no longer the determining factor."
Sensibly priced student accommodation
Simon Thompson, the managing director of Accommodation for Students, said: "The data shows that PBSA affordability has become the real dividing line in the student market.
"It's not about having the fanciest amenities anymore; it's about offering realistic value that students and their families can actually afford."
He added: "Landlords who understand that students are making smarter, more budget-conscious decisions will stay ahead of the curve.
"It's important to appreciate that PBSA isn't dying but there appears to be a recalibration, with sensibly priced student accommodation run by responsive landlords, will remain in high demand."
