Policy changes have not removed demand, but they have made it more volatile and harder to underwrite with confidence.

Recent immigration reforms illustrate the scale of the shift. Official Home Office data show sponsored study visa grants fell sharply from a peak of around 652,000 in the year ending June 2023 to around 414,000 in the year ending June 2024, driven in significant part by the collapse in dependant numbers following the January 2024 rule changes.

More recent figures suggest some stabilisation among main applicants, rather than a return to prior levels of growth. In the year ending December 2025, there were 426,471 sponsored study visa grants, up 3% on the previous year but still 35% below the mid-2023 peak.

The tightening of dependant rules in January 2024 has been the driving force behind this change. By restricting most undergraduate and taught postgraduate students from bringing family members, the policy has made the UK less attractive in key recruitment markets.

In many cases, the ability to relocate with dependants formed part of a longer-term migration strategy. Its removal has reshaped demand patterns, introducing a more pronounced element of policy risk.

Risk exposure is no longer evenly spread

That risk is not evenly distributed across the sector. Many regional PBSA schemes are closely linked to post-1992 or lower-tariff universities, which tend to have greater exposure to international taught postgraduate recruitment. This segment is particularly significant: 63% of sponsored study visas relate to master’s-level study, yet grants for these students fell 19% to 256,303 in the year to September 2025. These institutions often depend more heavily on overseas fee income and have less financial flexibility, increasing their sensitivity to shifts in enrolment.

•   The Finance Professional Show 2025: The Video
•   De-risking development: how the government can boost BTR
•   The hidden infrastructure behind successful development

The result of all of this is that universities can no longer be viewed as uniformly stable demand anchors. Their financial resilience, recruitment concentration and exposure to immigration policy are increasingly relevant to accommodation performance. Historic nomination agreements and occupancy rates remain useful indicators, but they provide less certainty than they once did. A more detailed assessment of institutional strength is becoming more and more essential.

Geographic differentiation is also becoming more pronounced. Over the past decade, regional university cities attracted significant investment, supported by strong international demand and favourable development economics. However, some of this demand was concentrated in specific institutions or student segments, leaving certain locations more exposed to recent policy-driven changes.

A clearer divide is now emerging between markets with diversified demand profiles and those with more concentrated exposure. Cities with multiple universities and stronger domestic student bases are better positioned to absorb fluctuations, while secondary markets may face greater variability in occupancy, valuations and refinancing conditions. This is feeding into more cautious underwriting assumptions and a greater focus on exit liquidity.

Flexibility becomes a core development strategy

At the same time, the changing environment is influencing how schemes are brought forward. Greater emphasis is being placed on flexibility, both in design and delivery. Phased development is increasingly seen as a way to manage demand risk, while adaptable unit mixes can help broaden appeal if international demand softens. There is also closer scrutiny of cost control, delivery risk and contingency planning, alongside a stronger focus on track record.

Despite these adjustments, the sector’s fundamentals remain intact. The UK continues to face a structural undersupply of high-quality student accommodation, and well-located assets are likely to remain in demand. However, the growth outlook is less certain and more dependent on external policy decisions than in the past.

What has changed is not the relevance of PBSA as an asset class, but the assumptions that sit behind it. International student growth can no longer be treated as a given. In its place is a more complex landscape where policy, institutional resilience and location all play a defining role in shaping outcomes- and where careful risk calibration is now central to preserving value.