European Student market still tilted in investors’ favour as ‘back to school’ season returns.

Chart 1: Population Trajectories for 18-25 year olds in Europe (millions)

Source: Eurostat and ONS, September 2025

Most European countries are forecast to see growth in the 18–25-year-old cohort up to the European peak in the early part of the next decade. Table 1 shows that the numbers of 18–25-year-olds are projected to grow across many countries up to 2031 with strong growth visible in places like the UK, Poland, Spain, the Czech Republic, Sweden and Ireland. Although the 18–25-year-old population in the German market is falling over the period we need to caveat that since numbers in this age group are forecast to reaccelerate again between 2031 and 2040.

Table 1: Strong near term population growth forecast for 18-25 year old cohort in Europe

Source: Eurostat and ONS, September 2025

*Peak assumed as 2031 for EU countries and 2032 for the UK

In addition to population growth, investors and developers also need to consider the significant demand impact of increased international student numbers at European universities over the past few years. For example, international full time student numbers totalled approximately 1.7 million based on the sample of ten European countries we track for which breakdowns are available*. In many European countries full time international students can now represent 10-20% of the total population of full-time students while in the UK the number is over 20%.

*Sample includes the UK and Ireland, Germany, Spain, Portugal, Sweden, Belgium, Czech Republic, Italy and Poland markets.

Asia in particularly has been a real growth engine for international student numbers in the past decade. Looking ahead, thankfully younger age demographic trends in the larger Asian countries are still largely positive. For example, the OECD is still projecting that the combined population of 20–24-year-olds in China and India will continue to grow until 2034 before slowly easing thereafter. The growing wealth in Asia should also help allay any concerns about potential impacts of rising educational costs in parts of Europe. To illustrate, 7 of the top 25 global nations ranked by numbers of millionaires came from Asia in the 2025 edition of UBS’ Global Wealth Report.

Consequently, we expect international students to continue to be a strong source of demand for European accommodation over the medium term. Another plus is that European universities remain highly rated with 13 of the top 50 ranked universities on www.topuniversities.com based in Europe and many of these located in the UK.

However, going forward investors and developers will need to be more aware of geopolitical impacts. In the US the government is seeking to reduce the intake of international students in universities as part of its efforts to reshape the college education system there. If successful, this could boost international student applications to European universities in the short term.

At the same time there are also changes happening within Europe which could affect international student trends. Post Brexit the percentage of EU students in the UK market has fallen although the latest data suggest that downward pressure could be easing. Nonetheless, reduced visa numbers and potential tightening in visa eligibility in the UK could spill over into greater international student applications at EU universities over the next number of years.

Overall, future European student accommodation demand is well supported by both population and international student trends. In addition to strong demand the lack of bed supply in European markets also bolsters the case for further investment. Student to bed ratios vary considerably across countries but one thing is clear – European markets are suffering from a distinct lack of student beds. Supply has been slow to recover in the aftermath of the COVID pandemic, not helped by the sharp rise in construction costs which has challenged the viability of schemes.

Whether we look at Germany, France and Portugal where student to bed ratios can be 10x or higher or markets like the UK and Ireland where they tend to be more like 2-3x, excess demand points to a positive medium-term outlook for rents which are currently growing at mid-single digit growth rates in many countries even in spite of question marks around the impact of this on student affordability.

All in all, many of the enduring trends that have fuelled the growth in the PBSA market in the past decade remain very much in place in our view. Higher educational attainment is still greatly valued by young people in what arguably is becoming a more complex economy and employment market. Demand for student accommodation is underpinned by a cohort of 18–25-year-olds that is still rising across much of Europe as well as a growing international student footprint. And on the supply side of the market, bed numbers are insufficient even based on current estimates of demand, nevermind future ones – something which augurs for a continuation in the recent positive trend in rents.

When we put all of these trends together it is easy to see why the PBSA market is so popular amongst investors right now and why capital is likely to continue to flow into the sector over the medium term.