Many in the PBSA sector are over- or under-estimating demand and targeting the wrong cities for new development, data from StuRents shared exclusively with Property Week shows.

When assessing potential opportunities in several of the UK’s most popular higher education cities, many developers and investors are failing to take into account existing HMO stock and concluding that PBSA is undersupplied when there is in fact sufficient supply or oversupply. Supply in these cities is consequently outstripping demand. Meanwhile, other cities where additional PBSA is required are being ignored, leading to demand outstripping supply.

“Understandably, PBSA developers and investors turn to cities with large student populations and often opt for locations home to Russell Group universities in search of favourable dynamics,” says StuRents’ head of research Richard Ward. “But when assessing the viability of a new project or investment, we encourage decision-makers to thoroughly assess PBSA and HMO market trends to better understand the addressable market and potential opportunities.”

According to the data, Bristol is undersupplied. Between 2017 and 2021, six additional students were added per new bed, according to the data, despite the fact supply jumped by more than 2,000 beds during this period.

Edinburgh was also undersupplied over the five-year period, with 2.9 students added to the market per new available bed.

However, in Coventry, PBSA supply growth had outstripped demand growth with 1.2 beds added per additional student. Similarly, Sheffield had 2.5 new beds delivered per additional student. Liverpool had an average of 1.3 beds added for every additional student.

In its Q1 update, StuRents estimates UK PBSA supply could grow by up to 4.6% in 2022.