March 16th, 2017
Brexit – we’re all fairly sick of having to discuss or hear about a subject matter that has been dominating the news for what feels like an eternity now. News, public discussion, business meetings and even conversations with family can often consist of European related agendas. However, the reality is that we may have to put up with the unrelenting bombardment for some time longer.
Working under the assumption that readers of this article are either students, student landlords or at least interested in investing in student property, continued coverage of the issue is unavoidable. Put simply; Brexit will have a significant impact on student numbers and applications.
Without the international contingent, who so often value city and town centre living, there could be a situation where currently strong tenancy rates drop, exposing investors to risk. For those with interest in emerging locations and institutions, there is also a real risk that a reduction in the number of international and European applications could stem the fantastic progress being made. Increasing student numbers and international presence go a long way towards elevating the reputation of emerging higher education facilities.
What are the numbers so far? According to the Higher Education Statistics Authority, undergraduate applications from international students have been increasing for 3 years in a row since 2012/2013 to a most recent number of 542,575, slightly down from the 2011/2012 high of 552,235. The more than half a million international students in the UK clearly represent a significant proportion of UK students and, subsequently, students seeking purpose rental built accommodation.
Since the Referendum result which ensured the UK would be leaving the European Union, many high-ranking representatives of the higher education sector have expressed dismay and concern over the government’s current approach to protecting international students.
Although the most recent published statistics from the Office for National Statistics (ONS) show a decrease in international non-EU students, the period only covered the three months following the Referendum. Nicola White, the ONS head of international migration statistics, was quoted in The Independent as saying: “There has been a statistically significant decrease in non-EU long-term students immigrating to the UK, while a small increase was seen in the number of study visas issued. It is too early to tell if this is an indication of a long-term trend”.
So far there have been no reliable indications of whether the EU vote result has had a significant impact on international student applications either from the EU or outside of it. The concern, it seems, lies with the government’s lack of a coherent plan to encourage students to continue studying in the UK.
Last October the Home Secretary, Amber Rudd, pledged a major crackdown on international student numbers at UK universities, linking the right to recruit foreign students to the quality of courses. The public consultation has yet to materialise, and how the government will evaluate courses remains unclear.
The majority in the higher education sector have been so far unimpressed by the government’s rhetoric and plans for student numbers. There are those that think the government may be softening its stance though upon the realisation that international students are key to not only the higher education sector as whole, bringing in over £10.7bn a year to the UK economy according to Universities UK, the umbrella organisation of university leaders. Speaking to the Guardian, Professor Colin Riordan, vice-chancellor of Cardiff University, said: “This may be excess optimism, but I’ve detected a bit of a change of tone in the government’s approach towards international students and the whole question of what it means to immigration. I have noticed that since the Prime Minister’s visit to India [in November], the rhetoric has been largely absent – we haven’t really heard much about international students”.
Further to this, the government has done its best to make assurances about the rights of students inside and outside of the EU once the UK has left the European Union. A report issued by the Higher Education Policy Institute (HEPI), and reported in the Telegraph, revealed that top British universities such as Oxford and Cambridge could each annually benefit from £10m in additional revenue following Brexit. The research suggests that British universities could increase tuition fee income by £187m in the first year if the government decides to charge European students the international rate. The HEPI also claimed that a 10% drop in the price of Sterling could lead to around 20,000 additional students. This would raise a further £227m from tuition fees.
In whatever circumstance arise, it seems the government are aware of the necessity of international students and the positives that they bring and will make sure that the avenues available for international study remain as open as possible. The other issue to consider is that UK universities are some of the best in the world. As long as changes aren’t drastic and complicated there should be no realistic decrease in the attraction of the UK as a place of study.
Student landlords should stay informed about developments but, considering the recent performances of student property and the softening rhetoric from the government, shouldn’t place too much concern on an investment industry that is showing no signs of slowing down.
Purpose-built student rental accommodation remains one of the strongest investment asset classes around, providing investors with impressive capital gains, high rental yields and notable tenant security. Have a look at our available investment opportunities and give us a call today!