University towns and cities across the UK are facing a shortfall of more than half a million student rooms, as landlords and investors retreat from a once-reliable market.
For years, the student rental sector was considered a safe bet. Houses of multiple occupancy (HMOs) offered strong returns, while demand for luxury, purpose-built student accommodation (PBSA) surged on the back of rising international enrolments. But a combination of pandemic disruption, rising costs, and regulatory change has shaken confidence.
During the Covid crisis, many students moved home, and international enrolments dipped for the first time in more than a decade. Since then, higher maintenance costs, stricter regulations, and tighter margins have driven smaller landlords out of the sector. The looming Renters’ Rights Bill, coupled with speculation over new taxes on rental income, has raised fears that even more landlords will exit.
At the same time, the supply of new student housing has failed to keep up with demand. JLL data shows private PBSA beds have grown from 61,000 in 2004 to 412,000 in 2024, while university-owned stock has barely increased. Yet just 1,609 new beds have been added so far this year, against a requirement for nearly 18,000 in 2025–26. CBRE forecasts a nationwide shortfall of 620,000 student rooms by 2029.
Construction costs are compounding the problem. According to Unipol’s former chief executive Martin Blakey, the cost of building a PBSA bed rose from £65,000 in 2018 to £110,000 last year, meaning only high-end projects charging £200+ per week are viable.
The private rental market tells a similar story. Handelsbanken research suggests a third of student landlords plan to sell up within a year. Rising mortgage rates, higher compliance costs, and successive tax changes have made student lets less attractive, with some landlords pivoting to professionals instead.
The consequences are visible on the ground. Students in cities such as Durham, Oxford and Glasgow have queued through the night for viewings. Only 11,000 new student rooms were added nationwide in 2024, a third of pre-pandemic levels. Meanwhile, rents have surged: hall prices rose 8.1% last year, and HMO rents climbed 5.3%. More than a third of students say they are struggling to cover housing costs.
The government’s Renters’ Rights Bill could intensify the crisis. It proposes ending fixed-term tenancies in favour of rolling agreements, which student landlords warn could leave them with empty properties over the summer months. Without exemptions for student housing, analysts say many landlords may exit altogether, worsening the supply crunch.
The National Residential Landlords Association has warned that thousands of student homes are at risk. Without changes, it says, investment will flow elsewhere and students will be left struggling to secure accommodation.
