Private developers signed a record 22 land deals for purpose-built student accommodation in 2024, totalling £473 million (AUD $910 million), according to the Knight Frank report.
Notable transactions include Greystar's acquisition of a former hotel now being transformed into the 1,014-bed One Medlock Street in Manchester and Dominus and Cheyne Capital's conversion of an office block at 65 Fleet Street in central London into student flats.
The report suggests that privately developed student accommodation has reshaped city skylines across the UK over the past decade, driven by rising rental demand and increasing student enrolments. Due to added amenities and modern facilities, these properties often command higher rents than traditional student housing.
Although international student numbers have dropped significantly in the past year following stricter visa policies implemented by the previous Conservative government, the student housing market remains highly lucrative due to high rental yields and the density of flats per development.
According to official data, UK private rental prices rose by 9 per cent in the year leading to December 2024. The research found that rents for private-sector student flats in 10 university cities increased at nearly twice the rate of university-owned housing.
A separate analysis of student housing costs found that the average annual student rent in London for 2024-25 reached £13,595 (AUD $26,170), surpassing the maximum student loan available for those studying in the capital for the first time.
In addition to private land acquisitions, universities are increasingly partnering with developers to build new student housing. These partnerships often provide cost advantages, as developers secure cheaper land and universities guarantee occupancy by directing students to these accommodations.
