Purpose Built Student Accommodation (PBSA) has matured into a recognised institutional asset class over the past decade. Across the UK and increasingly in Europe, the sector’s resilience and income stability have attracted long-term capital, underpinned by rising enrolments, global student mobility, and a structural undersupply of appropriate accommodation.
The UK residential housing market faces a structurally challenging outlook shaped by a decade of macroeconomic shocks and demographic shifts. Brexit, COVID-19, and the Russia-Ukraine conflict have driven inflation and interest rate hikes, with the Bank of England’s rate peaking at 5.25% in 2023. These pressures have eroded affordability, especially in London, where indexed sale and rent prices have nearly doubled since 2010, while real wages for low earners have declined by 9% since 2008.
The UK government recently published its highly anticipated Pension Schemes Bill, opening the door to more flexible treatment of defined benefit (DB) pension scheme surpluses. While buy-out remains the gold standard for member security, many trustees and finance teams are now exploring if, and how, running-on their scheme could work for the benefit of its members and the sponsor.