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Student Accommodation: Risk and Opportunity

Peter Hemple looks at the supply/demand imbalance within the student accommodation sector

Just prior to writing this article, GVA released its Student Housing Review, which revealed that last year saw the first reduction in total placed undergraduate applicants in the UK for five years. This was also only the third year since 2006 that the number of placed applicants fell.

Applications from England and Wales fell 2% compared to the previous cycle’s figures while Northern Irish applications fell by 3%. Universities UK has pointed out that there has been a fall in the number of 18-year-olds across the UK population which will account for some of the decline. EU applications also fell by 2% which in the context of previous rates of growth is a dramatic change, as in each of the last four cycles EU applications grew between 5% and 10%.

In fact, according to data from HESA, there were less students in higher education in the 2016/17 academic year (UK, EU and non-EU combined) than there was in the 2005/06 academic year, which is contrary to the oft quoted “the number of students just keeps going up and up” that the developers of student accommodation schemes like to say.

Scotland continued its trend of increased applicant numbers for the last five years, with a 2% year-on-year increase. Non-EU placed applicants also increased, rising by 4% from last year and at 36,850, now represents the highest number of non–EU applicants on record.

Of the non-EU countries, by far the largest number come from China (95,090), an increase of 14% since 2013. Of the major overseas contributors to our student population, only Hong Kong has surpassed that rate of growth with a 28% increase for a 2017 total of 16,680 students. Nigeria and India were the biggest fallers in this category last year, dropping 27% and 26% respectively.

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