Student accommodation a strategic lever for university growth

The growth of the UK’s higher education sector has and never will be linear. There will always be challenges and obstacles to overcome at different times.

For today’s senior leaders, the conversation around university growth has become increasingly nuanced and complex. Financial pressures, shifting recruitment patterns and rising student expectations are all converging at a time when institutions are being asked to do more with less.

Despite the headwinds, universities must continue to invest in the academic and residential experience to ensure they are fit for the future.

The accommodation challenge

One area where this is increasingly true is student accommodation. Once considered an operational necessity, accommodation is now a strategic lever – one that can directly influence recruitment, student experience and financial sustainability.

But across the sector, a common set of issues is emerging. Many universities face a shortage of available beds, while existing stock often no longer meets modern expectations around quality, affordability and sustainability. Research we commissioned with Student First Group (SFG) indicates 61% of university-owned accommodation (c.200,000 beds) falls short of current student expectations.

The challenge universities face in trying to solve this problem is balancing competing capital demands and the need to invest in core academic delivery. The analysis by SFG suggests universities collectively need £13.8bn to rebuild or refurbish their ageing residential estates. So how do you provide high-quality, affordable accommodation at scale, without diverting critical capital away from teaching and research?

For many institutions, traditional development models are becoming less viable. Rising construction costs, regulatory complexity and competing capital demands make large-scale redevelopment difficult to prioritise.

A structural imbalance in supply

The wider market context adds further pressure. New supply of purpose-built student accommodation (PBSA) has slowed, with planning constraints and viability concerns limiting development.

Even as some student behaviours shift – such as increased commuting in certain segments – there remains a clear mismatch between supply and demand in many university cities. This is not a challenge universities can solve alone. And it’s not one that private providers can address in isolation either.

Partnerships as a strategic solution

Universities are increasingly exploring partnerships to help meet their accommodation challenges. The advantage of co-investing in new student accommodation is that it enables universities to preserve capital for projects that directly support growth and academic excellence.  

At their best, partnerships allow universities to retain meaningful control over branding, student experience and rent setting while benefiting from external expertise in development, funding and operations.

Innovation in product design

Universities can leverage the expertise of their partner to deliver valuable commercial benefits and reduce project pressure. It’s not only an opportunity to increase bed numbers but also to deliver next-generation student living.

In partnerships with Newcastle University and Manchester Metropolitan University, Unite Students has specifically designed products to meet student expectations.

For example, with Manchester Met we have designed a 2,302-bed scheme to cater to a diverse range of student needs and budgets. We’re developing a property with a mix of cluster flats, studios, affordable rooms and postgraduate accommodation, and have created a large, unique kitchen-diner to support students looking for more affordable accommodation. There’s also a range of high-quality amenities including gyms, wellness studios, a rooftop exercise area, sports pitches and an allotment, to attract students of all years to stay on campus, as well as new retail and community spaces.

Beyond beds: supporting student outcomes

We know how important the living environment is – it influences wellbeing, sense of belonging and ultimately academic success.

According to a 2024 report from Knight Frank and UCAS, 69% of students living in PBSA said the quality of their accommodation positively impacted their academic outcomes, compared to only half of those living in the private rented sector.

PBSA, when thoughtfully designed and operated, can foster community, provide support services and create a more stable and positive student experience.

This is where partnerships can add real value. By co-designing accommodation aligned to institutional priorities, universities can ensure that provision reflects the needs of their specific student population – including affordability, accessibility and inclusivity.

The goal is not commodification, but integration: embedding accommodation within a broader student experience strategy.

Making partnerships work

However, a strategic accommodation partnership requires careful structuring and customisation. Partnerships must be transparent, aligned with institutional values and balance commercial and educational objectives.

No two universities are the same and partnership models must reflect that. Governance, risk allocation and long-term flexibility all need to be tailored to the individual university. Above all, a shared focus on student outcomes is essential. Financial sustainability matters, but it should not come at the expense of the student experience.

Looking ahead

The student accommodation landscape is evolving rapidly. Demand is growing, expectations are rising and supply remains constrained. In this environment, accommodation is no longer just an operational issue – it is a strategic priority.

By taking a more integrated and partnership-led approach, universities have an opportunity to not only address immediate challenges, but to position themselves for sustainable growth in the years ahead. The institutions that succeed will be those that continue to recognise accommodation as a core part of their value proposition and act accordingly.

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