Home Commercial Property Purpose-built student accommodation sees planning applications crash by 47 per cent

Purpose-built student accommodation sees planning applications crash by 47 per cent

by LLP Staff Reporter
4th Jan 21 12:18 pm

Could a declining pipeline of planning applications for purpose-built student accommodation impact the UK’s growing house of multiple occupants (HMO) sector?

According to data from student accommodation search platform, StuRents, planning applications for Purpose-Built Student Accommodation in the UK has seen a decline of 47.0% compared to just two years ago with only 22.3k beds being put forward so far this year.

The PBSA market, which peaked in planning applications in 2016, has seen the delivery of circa 60k bed spaces in the past two years to date. The declining pipeline indicates supply growth is slowing nationally, which is positive news for existing operators, yet, it does hide a significant disparity in supply on a regional level.

While Coventry and Sheffield have healthy development pipelines, both cities have seen a slowdown in planning applications, reporting falls of 58.1% and 76.7% respectively, when compared with 2018 figures. Edinburgh, however, has bucked the trend, recording a 48.8% uptick in applications, which shows investor appetite in certain UK regions.

Richard Ward, Head of Research at StuRents said, “Despite the national figures showing a considerable slowdown in planning applications, it’s not all doom and gloom for the PBSA sector. Some investors have identified certain regional cities, such as Edinburgh and Nottingham to name but a few, that have needed a boost in accommodation and taken advantage of current socio-economic conditions triggered by the COVID-19 pandemic. The key for PBSA providers going forward is to ensure the pipeline of operational beds doesn’t outstrip the demand.

“Although the HMO market still accounts for over half of the UK student accommodation sector, the PBSA market has rapidly increased its market share in the past six years and while market forces may be slowing its rise, we anticipate investor appetite will remain strong. With more school leavers anticipated to join university in the next five years, demand is unlikely to be abated, therefore the PBSA market will continue to attract institutional capital.”

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