For years, the image of student housing in the UK has been synonymous with draughty terraced houses, bin bags piling up on suburban streets, and landlords squeezing five students into a three-bedroom semi. But that model, the classic HMO, or house in multiple occupation, is under increasing scrutiny. As housing pressures mount in university cities, purpose-built student accommodation (PBSA) is stepping in with a quieter but potentially transformative impact: it's helping to unclog the housing stock HMOs have long dominated.
In cities like Nottingham, Leeds, and Manchester, students can make up over 30–40% of local renters. That’s no small figure. With the rise of student numbers and the financial appeal of renting to multiple tenants, large swathes of traditional family housing were carved up into HMOs over the last two decades. The result? A shortage of affordable homes for long-term residents, rising rents, and fractious tensions in neighbourhoods stretched thin.
PBSA offers an alternative. By housing students in designated, high-density developments, it can return HMOs to the general housing stock and prevent new ones from forming. According to JLL, around 31% of UK full-time students now live in PBSA, taking pressure off the private rented sector (PRS). In practical terms, that’s tens of thousands of homes freed up for families, key workers, and non-student renters.
And there’s more; HMO numbers are already declining. Since 2019/20, the UK has lost around 60,000–80,000 student HMO beds, due to local authority clampdowns, landlord fatigue, and rising compliance costs. Without PBSA to absorb displaced student demand, the housing crisis in university towns could be far worse.
What’s surprising is that this shift hasn’t made more headlines. Occupancy in PBSA is regularly north of 98%, and CBRE projects a shortfall of 620,000 student beds by 2028. Meanwhile, the pace of new delivery has slowed, with just 9,000 to 14,000 beds being added annually, half the volume seen five years ago. For investors, this spells opportunity. For cities, it spells breathing room.
In the long-running battle for space in Britain’s cities, PBSA may not just be a smart asset, it may be part of the solution. And perhaps, finally, we can start to imagine a city centre where students and residents don’t have to fight over the same front doors.
