The Future of Purpose Built Student Accommodation (PBSA) in the UK

The UK’s Purpose Built Student Accommodation (PBSA) sector delivers substantial economic benefits but faces mounting challenges. Alice Moore, Associate Director at Boyer, warns that the looming Renters’ Rights Bill could further strain the private rental market, driving up demand for PBSA.

With nearly three million students in the UK, the supply of PBSA remains insufficient, pushing many students into the private rented sector (PRS). The Greater London Authority (GLA) acknowledges that limited PBSA availability contributes to rising PRS rents. If the Renters’ Rights Bill leads landlords to exit the PRS, PBSA demand could increase further.

Despite this, securing planning permission for PBSA remains difficult, with many councils prioritizing conventional housing over student accommodation. Labour’s ambitious housing targets intensify the pressure on local authorities to favour traditional residential developments over PBSA. However, PBSA can play a crucial role in easing housing market pressures by freeing up shared rental homes. The Government’s Housing Delivery Test confirms that every 2.5 PBSA bedspaces equate to one self-contained home, demonstrating its broader impact on housing supply.

An increasing number of councils recognise that there is the potential to restrain future growth in HMO conversions (leaving housing stock to remain in standard residential use) by permitting PBSA development. However, without specific student housing targets, local policies often serve to restrict PBSA delivery. Some councils limit PBSA to certain areas or require proof that a site is unsuitable for residential use before approving student housing. Others have begun to demand that PBSA projects be adaptable for future residential conversion, raising further planning hurdles.

In a potential sign of policymakers recognising the issue in London, the GLA’s Draft PBSA Guidance highlights the socioeconomic benefits of student accommodation and suggests a more strategic approach to managing growth. By introducing student housing targets, councils could better address demand and take a proactive stance on PBSA delivery.

Currently, the London Plan estimates a need for 3,500 student bedspaces annually, but this is not distributed at the borough level, leaving developers to justify demand independently, viewed by developers as an inefficient approach to say the least.

One potential solution gaining some traction amongst planning experts is the extending of Permitted Development (PD) rights to PBSA, streamlining the conversion of suitable buildings into student housing. With ongoing PRS instability, a more supportive policy environment is essential to ensure the continued delivery of PBSA across the UK.

The planning policy environment continues to evolve however, against a backdrop of a reduced number of contractors, increased building costs, the Building Safety Act, and of course sticky interest rates, it may need to move more quickly if the UK PBSA supply is to keep up with demand.