Knight Frank’s research has found that nearly £575m was invested in the UK purpose-built student accommodation (PBSA) market in the final quarter of 2024, taking annual investment to £3.87bn.
The company said annual investment rose 14% in 2024, with year-on-year volumes rising from £3.39bn in 2023. While a pick-up in investment demonstrates the attractiveness of the PBSA market, volumes were less than anticipated in the fourth quarter.
“Deal times for stabilised assets are taking longer because of building safety regulations, which has pushed some transactions into early 2025. That said, overall activity was still robust.”
Merelina Sykes, Joint Head of Student Property, Knight Frank
According to Knight Frank, 66 deals completed in 2024, putting the year comfortably above the five-year average of 57 transactions. With a lack of standing stock available in 2024, the year’s transaction landscape was defined by a particularly liquid land market.
“PBSA developers have taken advantage of a quieter land market and softer pricing over the last 12 months, with some more traditional market participants having taking a ‘wait and see’ approach given challenges around viability and private sales demand.”
Holly Lush-Thurston, Research, Knight Frank
Knight frank also report that investment momentum looks set to build in the year ahead. The company is tracking around £1.3bn of transactions that are currently under offer. Most of the deals under offer comprise stabilised or portfolio deals, reflecting the opportunity investors see in upgrading and repositioning existing stock.
“Our team are tracking £1.3bn of transactions currently under offer. The majority of deals under offer are for stabilised or portfolio deals, reflecting the opportunity investors see in upgrading and repositioning existing stock.”
Merelina Sykes, Joint Head of Student Property, Knight Frank
Nearly 50% of deals completing in Q4 2024 were development sites, capping a record year for student land sales. Overall, 22 development site sales were completed over the course of the year, accounting for a third of deal volumes.
PBSA developers have been able to capitalise on a quieter land market and softer pricing, with some more traditional market participants taking a ‘wait and see’ approach given challenges around viability and private sales demand.
“Interest rates are on their way down, and this will continue to have an impact on debt costs. Financial markets are betting on two cuts to the Base Rate in 2025. This should pave the way more accretive debt finance and enhanced returns.”
Lisa Attenborough, Head of Debt Advisory, Knight Frank
16,382 new PBSA beds were delivered across 63 schemes in 2024, representing a 3% increase in bed spaces delivered compared with the previous year.
“Currently, the total pipeline for 2025 is just shy of 200,000 beds across the UK, with 23% of this under construction and a further 48% with full planning permission granted.”
Holly Lush-Thornton, Research, Knight Frank Research
Nottingham saw the highest level of new delivery with 3,639 beds added to supply, followed by London (2,454), and Leeds (1,874). The private sector continues to play the leading role in providing new accommodation for students, accounting for 81% of all new beds completed last year.
In total, funding deals and joint ventures accounted for a fifth of deals by volume last year.
“The private sector continues to play the leading role in providing new accommodation for students, accounting for 81% of all new beds completed last year.
“Looking ahead, the largest concentrations of pipeline in terms of the absolute number of beds are found in cities with large student populations, such as London, Birmingham, Manchester and Nottingham, which together account for just under half of 2025’s pipeline.”
Merelina Sykes, Joint Head of Student Property, Knight Frank
