Fall in foreign students to weigh on UK PBSA rents

Student accommodation yields have seen a relatively large 50bps increase over the past year. That looks to reflect a sharp drop in rental growth expectations, which in turn looks due to a renewed drop in foreign student numbers. Our new forecasts highlight that we expect student accommodation rental growth will slow to 1% y/y by end-26, but will then start to recover as universities adapt to tougher government regulations and, at 6.6% p.a. over 2026-30, student accommodation total returns will match the all-property average.