Problems ahead for international students in the UK

What does the latest VISA data mean for PBSA operators?

To summarise the StuRents Group and government data:

• There may be a 10%+ fall in Chinese student numbers in 2023/24
• Indian student application have increase by 69% - potentially doubling last year's numbers
• Nigerian student applications have increased by 135%

This is a BIG problem for PBSA and Indian students in particluar.... here's why:

PROBLEM 1 - PBSA operators are (in my opinion) over-exposed to the revenue and booking consistency that China has previously brought to their properties. If this drops by double digits there will be a hole at the top of the market.Private PBSA operators are heavily reliant on Chinese students because: they pay £40 more per week than Indian students, they prefer studios to ensuite apartments and they tend to book earlier in the sales cycle.

PROBLEM 2 - The UK PBSA market is not currently set up to effectively cater for the Indian student market. The majority book through agents and marketplaces. They tend to book late (although potentially there will be less VISA applications over the next quarter to even out the trend). Indian students pay on average £140 a week where Chinese students pay £180. They will currently be priced out of most markets and end up in HMOs. I've seen this first hand at University of Hertfordshire where many Indian students live in HMOs in Luton and commute to the University. Indian students also book late in the market so given that overall applications are so high, there will be little availability late in the market when they need it most.

PROBLEM 3 - Analysis from the Home Office report shows that Nigerians accounted for 40% of all dependants who accompanied foreign students in the 12 months to June 2022 – despite Nigerian students making up just 7% of all foreign students in that period. PBSA is definitely not set up for dealing with dependants (children), they can cope with double occupancy at best.

So what will happen?

• PBSA (and some university accommodation) will be too expensive for markets like India and Nigeria.
• PBSA availability will be extremely tight late in the market anyway as market trends show high occupancy already across the UK.
• HMOs close to universities will fill up.
• Students will be forced to live further away from universities in unsuitable locations or change their courses to locations where their accommodation budget and availability can be catered for.
• We may see students making university choices based solely on where they can afford accommodation.
• This may mean a resurgence for the likes of Coventry University , De Montfort University and cities like Sheffield, Liverpool where the prices are lower, proving more popular due to affordability which has been created by increased supply of PBSA beds.

All in all, the PBSA market is not set up for these huge shifts in demographics of our student cohort. It's going to be a tough year for a lot of international students but the squeeze will be felt in the affordable sector in particular. Students will be priced out of going to university in the UK.

The macro solution is that we need more affordable accommodation and more student accommodation in general to cater for these changing requirements.

At Student Housing Consultancy we know the Indian market (and we're working on Nigeria too). If you want to understand how to attract these markets and effectively cater for them as a university or a PBSA operator then get in touch.