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International students

UK cities will benefit from an increasing cohort of international talent in 2040 – with real estate to match

International students

The UK has a stable of world-renowned universities, and after the US, is the world’s second largest destination for international students. In 2016-2017, there were some 404,320 international students at British universities, who made up 22% of the student population. Of these, 30% are EU nationals. HESA estimates that the international student population has grown significantly, up 46% between 2007-2008 – but is this trajectory continuing today?

Not only can international students be credited with making our cities more culturally diverse, but they have also benefitted them economically:

  • Overseas students generate more than £25bn for the UK economy through spending during their degrees and the large number of visitors they attract.
  • Highly-educated international students who choose to remain in the UK after graduation can help reduce skills gaps in the UK economy.
  • A diverse workforce brings proven benefits to the workplace, and there is evidence (as stated by McKinsey, Deloitte, and the Harvard Business Review) that diverse teams and companies outperform. And what goes for businesses generally applies to their cities as a whole.

International students are increasingly important to education and student accommodation in British cities. Applications were up 7.7% year-on-year in 2018 (EU +3.4%, Non-EU +11%).

Figure 1: Applications to UK higher education from international students

Source: UCAS

48_International Students_pullquote_270x127This growth continues to support investment into purpose-built student accommodation (PBSA). In total, the number of students living in PBSA has trebled between 2007-2008 and 2016-2017. As a result, the quality of student accommodation available has increased, with amenities such as gyms, cinema rooms, study spaces and bookable dining rooms increasingly becoming the norm.

However, more recently, growth in overseas students has slowed, with an increase of just 7% over the past five years (2011-2012 to 2016-2017). There are many factors at play:

Figure 2: Growth in number of international students, 2007-2008 to 2016-2017

Source: HESA

British cities cannot take recent growth in international student population for granted. It’s clear that there will be challenges ahead, but given the importance of these universities to the knowledge-based industries that will lead the UK’s economy into the 2040s, they will not take these lying down. We expect that UK cities will lobby the Government to ensure a continued flow of the best and brightest talent from around the world, and provide the high-quality accommodation needed to enhance their individual propositions.

We suspect we’ll see continued growth in student numbers – and the real estate they live in – over the next 20 years. Despite all the challenges we have identified, the fact is that we’ve seen a decade of growth in student numbers. And as some of those challenges subside, this growth could even accelerate, providing a new dash of cosmopolitanism to our cities.

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Contact Us

Jo Winchester
Executive Director, Student Accommodation Valuation & Advisory Services
+44 2071822091
Oli Buckland
Head of Investment Properties, Student Accommodation
+44 2071822576

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