Key to this growth has been a strong global investor appetite for assets, underpinned by the safe haven appeal of the established UK market as well as rising demand from domestic and international students.

Investment has, in the main, emanated from North America, though there are signs that interest from Asia is growing.

The globalisation in the market extends to the make-up of the student body, with non-UK domiciled students representing 16% of full-time undergraduate students and 19% of higher education students overall.

It is expected that these proportions will be maintained, or even rise, in the future. Data from UCAS shows a 6% year-on-year increase in the number of applications from international students for the 2019/20 academic year.

A rise in applications from international students comes in spite of uncertainty surrounding the UK’s future relationship with Europe and serves to highlight the global appeal of UK universities globally.

Current demographic trends mean the number of 18-year olds in the UK is falling, however domestic demand is expected to rise over the long-term. Knight Frank analysis of ONS population projections, along with entry rates from UCAS, points to a 15% increase in full-time undergraduate numbers between now and 2030. This would represent an increase of 220,000 to over 1.7m.

The increase in applications and acceptances for international students has been a key factor driving the type of new PBSA entering the market in recent years, with a focus on studio flats, to cater for this international demand.

However, as affordability pressures become more acute, especially among domestic students, the mix of accommodation being built will change. Some 61% of new PBSA schemes due to be built for the 2019/20 academic year are en suite and cluster-led schemes, which typically command lower rents.

Some 25,000 new PBSA beds are being delivered into the market each year, according to analysis of planning data over the last three years. Even with this healthy pipeline, full-time student numbers outweigh available PBSA rooms by approximately 3:1.

What does the future hold?

In the short-term, many of the largest development opportunities will be in partnership with universities to redevelop older stock. This new generation of PBSA will be driven by quality, value for money and delivering student experience.

As new entrants and existing investors look to consolidate and acquire additional scale, bulk purchases will continue to be a feature of the investment market. Yield compression will continue as a result. However, this will occur primarily in markets where there are supply constraints, multiple universities and strong prospects for student number growth.

Affordability will also drive the agenda. The acquisition of schemes, where the rent that students pay is perceived as affordable, will become an important focus for investors. Consequently, the push towards even higher specification schemes will tail off as the sector focuses on delivering product which fully meets the changing needs of students.

The market for international students is expected to remain strong. However, developers who overestimate the depth of market for high-specification accommodation, targeted at the most affluent students will find it more difficult to achieve full occupancy. Demand will instead be strongest for accommodation that provides clear and obvious elements that add value.