There has been plenty written recently about grave concerns that EU and UK student numbers could significantly drop after the vote to leave the EU just over a year ago.
The theory went that due to the uncertainty caused by Brexit, and more specifically the rights of EU citizens, UK universities would see a significant drop in applications, but despite this we’ve been studying the UCAS application figures for the 2017/18 cycle and they have made encouraging reading.
The figures are from official UCAS statistics and were produced before this year’s official cut off period. They take into consideration UK domestic applications and also applications from EU and then other international destinations.
Up to this point, landlords have been enjoying extremely fertile conditions for Purpose-Built Student Accommodation (PBSA), as UK universities have ranked as some of the most desirable in the world. High rental yields, plentiful investment opportunities and high student numbers have all contributed to a sector that has been outperforming many of its contemporaries in the residential and commercial sector.
With foreign conglomerates and multinational investors now getting investing heavily in student accommodation, the time has probably never been better to get involved with student property investment. But rumours about falling application numbers continue to spook some on the periphery.
Here’s our analysis of the latest figures. Some had predicted drops of up to 15% following Brexit and the announcement of the scrapping of some grants and loans. In the EU some had predicted up to a 40% drop, but in reality there’s only been a 7% drop according to official figures.
In the UK, the headline decrease is 5% of the overall applications from last year, meaning just a modest drop and in line with previous drops. Although it seems like an initially high number considering the high application rates already, it actually means that rather than taking 428,940 applications, as they did in 2016, UCAS has taken 408,500 applications this year. This is a drop of just 20,440 students. Spread over the breadth of the UK it’s still disappointing but unlikely to make a significant impact.
According to the UCAS report, UK applicant figures have decreased by 5% to a total of 469,490 and EU applicant figures decreased by 7% to 42,070. The number of applicants from other overseas countries is 52,630, similar to last year.
Across the UK, the number applying to higher education has fallen: from England by 6%, from Northern Ireland by 5%, from Scotland by 2% and from Wales by 7%.
The analysis reveals that the largest decreases are for older applicants from England and Wales. In England the number of 19 year old applicants has fallen by 9%, 20 year olds by 9%, 21-24 by 15%, and 25 and over by 23%. The number of first time applicants has decreased by 4%, whilst the total re-applying to higher education has decreased by 10%.
Clearly, any drop in student numbers is likely to affect the overall PBSA market, but it should also be said that the drop is highly unlikely to affect the major cities and universities that have been the sources of the greatest recent success. Cities like Manchester, London, Liverpool, Leeds and York are historic and popular student towns which are always likely to be in high demand.
Although disappointing these figures should certainly be seen in the context of previous predictions by those concerned by the Brexit environment. Rather than, 10%, 15% or even 40% drops, we are seeing small drops absolutely consistent with those seen in the last five to 10 years.