Investment in UK purpose-built student accommodation (PBSA) in the first quarter of 2024 hit nearly £750m, according to Knight Frank.

In its latest UK Student Housing Market Update, Knight Frank revealed a significant increase in investment compared with the same period in 2023, when investments totalled £148m.

The agency reported that the £750m was split across 21 deals.

Despite the investment jump, volumes were down in comparison with the bumper starts to the year recorded in 2021 and 2022.

Knight Frank said the transaction evidence suggested yields for student accommodation are more resilient than many other traditional real estate sectors, shifting by around 50 to 75 basis points from peak pricing.

London was found to have the largest pipeline, with property that will contain around 26,000 student beds either under construction or greenlit for development.

Other large markets include Manchester, Bristol and Nottingham, with schemes in the pipeline set to add a total of 10,500, 8,700 and 7,600 beds respectively.

Merelina Sykes, joint head of student property at Knight Frank, said: “The UK student accommodation sector demonstrated its resilience in the first quarter, attracting significant investment despite the broader economic headwinds.

”While total deal volumes are down compared to recent years’ peaks, the sector’s strong performance reflects investors’ confidence in its long-term prospects.”

Build cost inflation was also found to have slowed to 3.1% last year, from a peak of 15.5% in 2022.

Katie O’Neill, head of student property research at Knight Frank, added: “Heightened by the lead up to a general election, Q1 saw restrictions to the student visa route come into effect. However, it is important that policymakers do not to conflate student visas with actual student numbers, with many students securing visas for multiple countries.

“Without a greater understanding of this and the economic benefits international students bring, there is a real risk of an over-correction, which ultimately has knock-on effects for the financial health of the UK’s higher education sector.”