Don’t Believe the Hype: The Data Still Points to Enduring Demand for a Degree

Over the past couple of months a run of headlines has questioned the financial logic of a UK university education. Of course, it’s that time of year. The announcement of A-level results and the award of University placements combine with a quieter summer holiday news cycle to create headlines that are not always positive or helpful.

So what about these headlines, and do they really matter?

The Financial Times reported that two-thirds of students run out of money before the end of term; the BBC suggested a record number of prospective students are planning to live at home because of what it called “insane” accommodation costs; and separate data claimed entry-level graduate roles have fallen by 46 per cent. For an institutional audience assessing risk and return in the purpose-built student accommodation sector, yes these stories matter: sentiment shapes demand assumptions as much as fundamentals do. Look behind the numbers underpinning each story, however, and it is the methodology, not the sector, that should be under scrutiny.

Take affordability first. There is a genuine cost-of-living pressure on students, and that should not be dismissed. But maintenance loans and grants have never fully covered the cost of tuition and living, and supplementing income with part-time work has been a feature of UK student life for decades. This is a structural characteristic of the funding system, not evidence of a sudden collapse in the value proposition of a degree.

The claim that “insane” accommodation costs are driving more students to stay at home also warrants closer reading. The underlying reporting was built substantially around one student’s experience of finding rents at £300–£400 a week in Liverpool. Upon looking ourselves of course we found rents at £300+ a week in Liverpool, but we also found rents of £90 per week and the average spans from £110-£180 per week according to Sturents. Of course, all of this depends on what amenities and extras students want, whether bills are included and how much they want to spend.

In general, PBSA rents span a wide range, driven by unit size, location and amenity specification, and yes, rents are rising; but that increase reflects the cost base required to make new schemes viable to build and operate, not an arbitrary premium. The economics of rent-setting in PBSA is a subject this regular column will return to in its own right at another point in time.

The most quantifiable of the three claims – that entry-level graduate roles have fallen 46 per cent – is also the weakest evidentially. That figure comes from a single job-advertising platform’s listings, which is a proxy for that platform’s market share, not a robust measure of the graduate labour market. ONS data, as Resi Consultancy’s Dan Smith has pointed out, put the actual year-on-year contraction in graduate roles at 8 per cent, against a 9.6 per cent decline across the labour market as a whole. On the government’s own figures, graduate employment has held up better than the market average, not worse.

Individually, each of these stories overstates its case. Collectively, over the space of a few weeks, they build a narrative that students and their families are losing faith in the value of a degree. At the time of writing this piece, despite an August lull in general business/policy news meaning stories like this are given more inches, the PBSA sector is actually at the highest peak of its letting cycle meaning operator teams are at peak nervousness to ensure full occupancy.

Operators (and investors) are acutely aware of a rising propensity for students to want to stay at home and the ongoing cost-of-living crisis. Affordability has been a top concern of potential students for some time and this, in itself, has led to viability issues and a slowdown of new developments in the pipeline. But there does still remain choice in quality and value of product, and those choices are still being made.

Alongside the rising ‘choice’ of students to live at home and study are a rising alternative cohort of students who are desperate to leave the family home and experience freedom. Some of these do place higher value on ‘being away’ than on ‘education’ but it also still leads to the demand for rental living. The point is that young people are not homogenous and the sector – and its media – needs to see the bigger picture.

Whilst this is a narrative with UK origins it has a readership, and a potential influence on investor and occupier sentiment, that extends across the European and global PBSA markets. For real insight, this audience needs to delve beyond the headlines.

The strongest test of that narrative is not another headline, but the data UCAS published on and around this year’s A-level results day. Applications to start courses this autumn reached a record 695,740 by the June deadline, up from 665,070 in 2025, and universities had made 2.07 million offers by January. This is hardly the behaviour of a market falling out of love with higher education. On results day itself, a record 262,820 UK 18-year-olds secured a place, up 3 per cent year-on-year, and 446,690 applicants of all ages were accepted onto courses in total, up from 439,180 in 2025.

There is one genuine nuance in the data, and it is worth stating rather than glossing over: the entry rate among 18-year-olds (the proportion of that age group taking up a place) edged down slightly, from 32 per cent to 31.6 per cent. That is not evidence of falling demand; it reflects a larger 18-year-old population producing more absolute acceptances even as the proportional rate holds broadly flat. Read alongside record applications and 2.07 million offers made, it does not support a story of families turning away from higher education.

The subject data reinforces the same conclusion from a different angle. Applications to engineering and technology courses rose by 38,260 year-on-year, and mathematical sciences applications climbed from 68,150 to 75,650, continuing a shift toward subjects more visibly linked to employability. That is not a rejection of the value of a degree; it is students and families making a more calculated assessment of which degree delivers the clearest return: arguably a sign of a more discerning, not a more sceptical, applicant base.

For those of us allocating capital to, or operating within, the rental living sector, the distinction matters. A genuine narrative of collapsing demand for higher education would be reason enough to reassess underwriting assumptions for PBSA. A narrative built on selective anecdotes and single-source data, set against record applications, record offers and record 18-year-old acceptances, is not. The fundamentals of student demand remain intact; what has changed is the noise around them, and institutional investors are well served by looking past it to the data itself. That’s the point. There is plenty of life left in UK (and global) PBSA but, as always, each location, asset and customer base needs to be looked at individually to create value and long-term income.