Sam Scott shares their outlook on the future of UK student accommodation, from evolving demand and investment to affordability, sustainability and student experience.
Market & Demand
What fundamental shifts do you anticipate in UK student demand over the next decade, and how should the sector position itself to respond?
Demand will remain structurally resilient, but it will become more segmented, more price-sensitive and more concentrated around institutions with strong reputations, employment outcomes and international appeal. I think the sector is moving beyond a simple “more beds” response. There are more nuanced offers: premium accommodation where demand can support it, and mid-market and value-led products for affordability will increase. The sector needs stronger partnerships with universities to align accommodation supply with recruitment strategies. The winners will be operators that understand demand at city, institution, and price-point levels rather than relying on national growth assumptions.
To what extent are changing student demographics and expectations reshaping the design and location of accommodation assets?
Demand needs to be understood through both domestic and international lenses, as each is moving differently. Internationally, the pressure is most visible in postgraduate demand, where visa policy changes and restrictions on dependants have reduced applications from some key markets. That creates short-term risk for cities and assets that have been heavily reliant on taught postgraduate intake. However, the picture is not uniformly negative; there are positive indicators in undergraduate international demand, and I am cautiously optimistic that European student numbers will gradually recover over time following the initial post-Brexit impact. Domestically, the outlook is supported by an uptick in 18-year-olds progressing into higher education over the short to medium term. The challenge is affordability; more students may choose to study closer to home or remain at home if the total cost of higher education becomes too great. For accommodation providers, this means demand is still there, but it will be more localised, more price-sensitive and more dependent on university strength, course mix and the ability to offer genuine value.
Strategy & Investment
How are you thinking about portfolio strategy in today’s market—balancing new development, acquisitions, and asset repositioning?
Portfolio strategy ultimately sits with our clients, and our role is to support them with clear insight, operational evidence and practical options. In today’s market, that means being more disciplined, more active and more focused on the long-term role each asset plays within the portfolio. New development remains an important route to growth where the fundamentals are strong, although viability needs to be carefully tested against construction costs, planning, funding and affordability. The larger developers will have the scale and expertise such as Watkin Jones to service this market. Stabilised acquisitions can provide attractive access to income and operational scale, particularly where pricing properly reflects capex, ESG, fire safety and realistic rental growth. We are also seeing real opportunity in asset repositioning (Refresh by Watkin Jones), where existing stock can be upgraded, operationally improved or repositioned to strengthen performance without over-capitalising. The strategic question is not simply whether to develop, acquire or reposition; it is how each asset can contribute positively to portfolio resilience, customer value and long-term returns.
What are the biggest risks and opportunities for investors in the student accommodation sector right now?
The risks are well-trailed in the market, but at a macro level they centre on the continued reputation and financial standing of the higher education sector. Investor confidence is closely linked to the strength of universities, their ability to attract students and the broader perception of the UK as a high-quality, welcoming and accessible education destination.
Government policy is also a key risk factor. Changes that make the UK less attractive to international students, including reductions in post-qualification work opportunities and restrictions on dependent visas, can affect demand in certain markets and cities, particularly where assets have relied heavily on international postgraduate students.
From a development perspective, viability remains the major challenge. Land values, construction costs, planning risk, funding costs and liquidity for new development all continue to test whether schemes can be delivered at rents that are affordable for students while still generating an appropriate return for investors.
For stabilised assets, the risk is more operational. We are seeing ongoing pressure from labour, supplier and energy costs, which are contributing to wider cost-of-living pressures across society. In many cases, these cost increases are not being fully offset by rental growth, so boards and investors need to remain focused on operational efficiency, service quality and protecting long-term asset resilience.
There are also clear opportunities. Well-located assets will continue to perform strongly, but the emphasis is increasingly on micro-location, proximity to the right institutions, transport, amenities and the depth of local demand. Older stock can also present attractive repositioning opportunities, particularly where thoughtful investment can improve the student experience, strengthen operational performance and create value-add potential without the risks associated with ground-up development.
Collaboration between universities and the private sector will also be increasingly important, particularly where accommodation strategy needs to support recruitment, affordability, wellbeing and campus planning. In parallel, advances in AI have the potential to drive efficiencies and innovation across development, construction and operations, from design optimisation and procurement through to energy management, resident engagement and predictive maintenance.
More broadly, AI may also influence how higher education is delivered over time, which could reshape demand patterns, student expectations and the role accommodation plays in supporting the overall university experience. Could we see more appetite for 2-year degrees as this would work for students, reducing their costs and work for investors looking for consistency of tenancy throughout the year. For investors, the opportunity is to back assets and platforms that are resilient, adaptable and able to respond to these shifts rather than relying solely on historic demand assumptions.
Student Experience & Value Proposition
How is the definition of “value” changing for students, and what must operators do differently to meet those expectations?
Value is no longer defined by price or specification alone. Students and parents increasingly assess value through certainty, safety, service, wellbeing, location, flexibility, reviews and the quality of the day-to-day experience. Accommodation selection is now strongly influenced by reputation and peer feedback; students want confidence that the lived experience will match the promise made during marketing and sales. Operators therefore need to be clearer about what students are paying for, including the service, support and community around the room, not just the room size itself. For developers, I would advise discipline around amenity inflation that adds cost without meaningful benefit. The strongest propositions will combine transparent pricing, reliable service, strong reviews, inclusive communities, smart use of space and a clear link between accommodation, lifestyle and academic support.
In what ways can accommodation providers contribute more meaningfully to student wellbeing, community, and academic success?
Accommodation providers already play a meaningful role by recognising that the services and environment we provide directly affect student adaptation to student life, introduction to friendship groups and support. This is one of the significant differences between an HMO or PRS that a student may choose. This does not mean trying to replace universities or clinical services. It means creating environments where students feel safe, connected and supported with trained on-site teams, early identification of isolation, inclusive events, quiet study environments, clear escalation routes and partnerships with universities and local and online services. We focus our proposition on purposeful living environments that help students thrive rather than just amenities that they get as part of their rent. I think the PBSA sector has moved significantly over the past five years in this direction and work with Real Estate:UK has supported this journey.
Affordability & Regulation
How can the sector address increasing affordability pressures while maintaining viable and attractive returns?
I think there is a shared objective across the sector for young people from diverse backgrounds to continue to have the opportunity to live away from home while at university. I personally benefited from that experience, and my children have too. However, it is increasingly a personal financial investment, particularly where maintenance support is insufficient and there appears to be limited political appetite to address that gap in the near term. This is the challenge everyone is trying to solve, but it is complex and many of the drivers sit beyond the sector itself, including wider economic conditions, construction costs, land values and the cost of debt. A political response could be to rent controls, but I have not seen evidence that this would solve the underlying issue or support the development of new supply. The sector can and should respond by offering a broader range of price points, designing more efficient buildings, reducing operational waste and using data to optimise services. However, none of this removes the minimum rent level required for a developer or investor to achieve a viable return for the risk they are taking. I do believe there is scope for a simpler, more affordable product, but it will not be the same product the market has become used to. That means expectations need to evolve, with developers, ANUK, student groups, universities and investors working together to define what a minimum viable product should look like and how it can be delivered sustainably.
What impact do you expect regulatory changes to have on the sector, and how should boards proactively respond?
From my perspective, greater regulation will increase the premium on governance, transparency and operational capability. Boards should expect greater scrutiny around tenancy structures, consumer protection, building safety, environmental performance, affordability and resident outcomes. The strategic response should be proactive rather than defensive: clear risk ownership, stronger data reporting, scenario planning, regular policy horizon scanning and early engagement with sector bodies. Regulation does create cost and complexity, but it will also widen the gap between professional operators and less sophisticated providers.
Sustainability & Innovation
How is ESG influencing your decision-making at board level, and where do you see the biggest gaps or opportunities in the sector?
ESG has slowed in priority; however, it is moving from a reporting requirement to a core value and risk driver. At board level, it is increasingly influencing acquisition criteria, capex planning, energy strategy, procurement, customer proposition and investor communication. The biggest opportunity is to connect environmental performance with operational efficiency and affordability, rather than treating ESG as a separate workstream. We have had more traction in this over the past 18 months to unlock capital. The biggest gap is often the quality of asset-level data and the ability to translate that data into investable decisions. Boards should prioritise measurable pathways to lower energy consumption, stronger resident engagement and improved long-term asset resilience. I have also seen innovative models that help landlords make smarter decisions more quickly, and as technology costs reduce, faster returns can be achieved.
What role will technology and data play in shaping the next generation of student accommodation, from operations to resident engagement and sustainability?
Technology and data will be central to defining the quality, efficiency and resilience of the next generation of student accommodation platforms. Operationally, better data can improve forecasting, pricing, maintenance, energy management, staffing and resident support. For students, technology should remove friction from the living experience, from booking and onboarding through to communication, maintenance reporting, community engagement and access to support. For investors and boards, the opportunity is to create clearer, more consistent reporting that links operational performance, customer experience, ESG outcomes and financial returns in one view. Everyone is on their own AI deployment and how it can be integrated in both visible and invisible ways across departments, enabling better decisions, improved service consistency and stronger evidence of outcomes for residents, universities, investors and boards.
Renters Reform Act
How do you anticipate the Renters Reform Act will reshape the risk profile, operational model, and investment attractiveness of the student accommodation sector, and how should boards respond strategically?
The Renters Reform Act will increase operational complexity and shift risk from a largely predictable fixed-term rental model towards a more dynamic tenancy environment across the living sector. For PBSA, following the transition year, where operators are accredited to ANUK and have moved their tenancy agreements to common law, the Act provides an exemption that enables fixed-term tenancies to continue. That is a significant relief for a sector traditionally built around 44-week and 51-week tenancy models.
However, we are seeing demand from some students for different tenancy lengths, which could make HMO, PRS and BTR options more attractive where they offer greater flexibility following the Act. In the HMO market, landlords have shifted from legally securing tenants very early in the cycle to using a reservation process until leases can formally be issued. HMOs will still carry early termination risk, and some landlords may look to offset that through higher rents, particularly where there is pricing headroom compared with PBSA. This will look different for institutional HMOs compared with private landlords. Anecdotally, we hear that some private HMO landlords are leaving the market, which could support demand for the PBSA model. The key question for students will be whether that flexibility represents value for money.
For BTR, I think the jury is still out. We know BTR can be a popular choice for students, but the question is whether it is sustainable for owners to accommodate students over the long term. Some BTR operators may tighten student quotas as they seek longer-term residents. For owners, the risk is not only rent loss but also potential council tax exposure, creating a double impact.
Boards should therefore track tenancy length as a core KPI, segmented by resident type, product type and asset. This will help identify changes in booking behaviour, early termination risk, re-letting performance, cost of acquisition and the extent to which different resident groups value flexibility over certainty. That insight should then inform pricing, product design, forecasting, operating resources and investor reporting.
What changes have your organisation already made?
We have reviewed our tenancy terms, customer communications, re-letting processes and operational resource requirements to ensure the business remains commercially resilient while continuing to provide a fair and supportive student experience. We prepared as far as we reasonably could and, for this PBSA cycle, held back from issuing tenancy agreements until May, when the Act came into force. This has enabled us to limit the transition year impact to the 2025/26 academic year cycle.
Following the Act, we have been closely monitoring early termination trends and have implemented stronger reporting of revenue and void exposure. In this cycle, around 450 students exercised their right to shorten their tenancy by giving notice.
For our BTR and co-living tenancies, we are also strengthening the evidence base for proposed rental increases, which can now be challenged by residents and referred to a panel, delaying the date on which increases take effect. We expect to see a high level of challenge, given the Act is drafted in a way that gives residents greater ability to contest increases.
Thank you to Sam Scott, Managing Director, Fresh Property Group, for your insights.
This Q&A is part of a wider campaign featuring insights from senior UK student accommodation leaders. Discover more content from this series.