Research from property developer and PBSA specialist, Stripe Property Group, analysed the latest figures on the size of the PBSA sector, a sector that supplies vital stock to meet the overwhelming demand from the nation’s student population.
The latest figures show that the current market size of the sector is an estimated £3.971bn, having increased by 67% in the last decade from £2.4bn in 2013. It peaked at its highest point in 2020, with an estimated value of £4.1bn. However, as the impact of the pandemic took hold, the market size of the PBSA sector plummeted by -21% in a single year to £3.2bn in 2021.
This saw the market size of PBSA cut to its smallest level since 2016, driven by Covid restrictions that prevented students from pursuing higher education in a physical format.
However, the sector has bounced back in 2022, with the estimated market size increasing by 23%, although it remains 4% below its pre-pandemic peak.
But the latest forecasts suggest that this pandemic impact could be well and truly put to bed this year, with the PBSA sector predicted to hit £4.2bn in market size in 2023, an annual increase of 6% and 2% above its pre-pandemic peak.
Stripe Property Group also estimates that PBSA momentum will keep on building, climbing by a further 8.1% by 2025, with total market size hitting over £4.5bn.
James Forrester, Managing Director of Stripe Property Group, commented: “While pandemic restrictions were problematic for many areas of the UK property market, the PBSA sector was hit particularly hard by the almost immediate reduction in demand for student housing, as higher education was no longer pursued in a physical format.
"This brought about a notable reduction to the market size of the sector and we’re still feeling the impact of this downturn today.
"However, we are heading in the right direction and we predict that the impact of the pandemic will be nothing more than a memory by the end of this year. The returning health of the PBSA sector has been driven by a return to normality for many students and purpose-built student accommodation is once again in very high demand.
"We’ve seen the stories around the shortage of suitable accommodation to meet demand and so the vital role played by the PBSA sector is only going to grow in importance as the years go on.”
