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Student Accommodation Update

Overseas demand is not a problem...for now! Peter Hemple reports

Demographics is a hot topic at the moment. Already this year, we have heard that the Chinese population is now falling for the first time in 60 years, shortly followed by the CCP announcing that unmarried women in China can now have children, this after raising the child limit for married couples from one, then to two, and then to three etc. How kind of them to allow this. Unfortunately for China, that ship has already sailed. The country is expected to shrink by around 15m people per year for the foreseeable future, which is going to result in an awful lot of empty homes.

Japan is no stranger to this of course. The world’s oldest population has long struggled with a low birth rate and the Japanese Prime Minister announced at the end of January that the country is “on the brink of not being able to maintain social functions”.

The total population of the European Union has been shrinking for two years now, albeit only by around 66,000 people between 2020 and 2022. But this is just the start of a long-term downward trend. Some European countries are ahead of the curve compared to their neighbours. Italy, for example, reached a population peak in 2014 and in the following seven years the Italian population decreased by 1.7m people, hence why there are dozens of villages in Italy where you can buy a home for just €1 if you agree to move in and renovate it.

But other European countries, nearly all of them in northern Europe, have still got increasing populations and the UK has long been listed as a country that does not have a demographic ‘problem’. However, in early January this year, the ONS downgraded its population growth forecasts (previously made in 2018), now expecting 600,000 fewer people by 2035 and 1.8m fewer by 2045. In fact, between mid-2020 and mid-2030, the ONS expects 59,000 more deaths than births in the UK. The only reason the overall population will keep rising during those years is due to an expected net migration of 2.2m people to the UK. Obviously, since Brexit, most of these people will be arriving from outside the EU.

However, it is worth noting that last year around 40% of all long-term immigration of non-EU nationals arrived in the UK on study visas. Of those, by far the largest percentage, around 30%, came
from China.

It seems then, that the growth of the UK population over the next 10 years, and especially the growth within the purpose-built student accommodation sector, is dependent on two key factors. One, that our government continues to allow overseas students to arrive here in such large numbers, and two, that the UK does not ‘fall out with’ China. Both of these factors are far from set in stone.

Which is more likely - sanctions on China or a cap on foreign students?
China’s President Xi Jinping opened the 20th National Congress of the Chinese Communist Party (CCP) in Beijing last October by pledging to take control of Taiwan and advocating the “one country, two systems” policy, according to the state-run media.

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