LODGE: A Living Sector Update Summer 2026
PBSA – the future of the Living Sector in London?

By Sadie Pitman
LODGE: A Living Sector Update Summer 2026
PBSA – the future of the Living Sector in London?

By Sadie Pitman
With over forty higher education institutions, the capital is a global hub for students. Developers have therefore increasingly been looking to capitalise on the growing need for - and undersupply of – Purpose-Built Student Accommodation (PBSA) in London.
What is PBSA?
PBSA is housing dedicated to students, typically consisting of blocks of studio and multi-bedroom flats which have shared kitchen / dining / living areas and shared amenities (such as laundry facilities), known as clusters. Bedrooms are let individually to students typically on 44-51 week ASTs with the overall block managed by a student accommodation provider (such as Unite) (which will be a university or some other landlord).
Planning framework for PBSA
The National Planning Policy Framework (the NPPF) currently requires local planning authority to assess the housing need of its students. The Government has reiterated this requirement through its proposed reforms to the NPPF which will require development plans to identify suitable sites for PBSA. The latest draft NPPF provides further clarity on this, detailing that PBSA should be located where student residents will be able to access frequently-used services and relevant education facilities easily and safely by walking, wheeling or public transport. The proposed reforms also state that PBSA should provide adequate living and storage space and sufficient shared cooking, laundry and amenity areas. These requirements are not particularly groundbreaking, but it’s helpful that the draft NPPF details that a planning condition should be imposed on a planning permission approving PBSA development to ensure that the PBSA is supported by a management plan, showing how the development will be managed and maintained to ensure the continued quality of the accommodation, communal facilities and services. This will save time negotiating such a plan as part of a S106 agreement. Below this overarching national framework, the London Plan leads the way on PBSA policy being supportive of PBSA. Having found that 3,500 PBSA bed spaces were required to be provided annually through the London Plan period, London Plan Policy H15 requires boroughs to ensure the need for PBSA is met. Policy H15 requires that the majority of PBSA bedrooms are secured via a nomination agreement either by way of a planning condition or obligation. However, the process for a new London Plan is currently underway, with adoption expected in 2027, and the consultation document (found here) suggests that nomination agreements are best suited for affordable units only. This would help to remove a barrier in delivery by no longer requiring a development to be intrinsically linked with a particular university and its recruitment plan and would be a welcome shift in London Plan policy. PBSA developments are required to provide a percentage of affordable units, being units with a rental cost equal to or below 55% of the maximum income of a new full-time student. The current London Plan states that developments providing less than 35% need to be viability tested. However, it’s helpful that the London Plan Guidance for PBSA encourages authorities to consider the viability of PBSA in light of the lack of availability of CIL relief – and it will be interesting to see whether the new London Plan acknowledges this through any drop in required affordable unit thresholds. The London Plan Guidance provides some commentary on where PBSA developments should be located (recommending the Central Activities Zone, Inner London Opportunity Areas, areas of high public transport accessibility, and various town centres that are either established or have growth potential) and advocates for incorporation of other land uses in PBSA developments. The latter could be achieved through provision of communal facilities like gyms and libraries or employment spaces and would ensure that the PBSA is closely connected to the local community - often a key concern of officers determining planning applications. Indeed, the consultation document for the new London Plan recognizes the need for balance between PBSA and other forms of housing but it remains to be seen whether this will come through as part of borough wide targets for PBSA in the next London Plan. Nevertheless, the consultation document highlights the critical need to support London’s universities and the knowledge sector’s contribution to the economy through PBSA, for example by students’ spending or their taking on jobs during their studies.
Recent PBSA planning permissions
A report by Lichfields identified that the number of PBSA planning permissions granted in London grew significantly across 2024 and 2025, with the majority located in inner London. For example, last November Dominus received approval for a scheme of 692 beds in Stratford that offered 35% affordable housing. In this instance, whilst there was already a high concentration of student housing in the area this was given limited weight by planning officers (see here) due to the overarching shortfall in housing.
The outlook for PBSA
Long-established Government guidance advocates that encouraging more dedicated student accommodation may provide low cost housing that takes pressure off the private rented sector and increases the overall housing stock. It is against this background that the new London Plan consultation recognises the need for PBSA and recommends removing barriers to its delivery, whilst also recognizing the need for varied housing tenures and inclusive developments. With the market remaining chronically under-resourced for PBSA (the national student to bed ratio is anticipated to be 1.9 to 1 by 2030/2031, as set out in a Cushman & Wakefield report), university rental growth outstripping the private sector, and declining delivery of dwelling-houses (see this HBF report) amidst weak demand from first time buyers, PBSA is likely to be front and centre of construction plans as we continue through 2026. If you would like assistance through the planning process for your PBSA development please do not hesitate to contact us.