New Schemes Completes for UCLan
18th Sep 2020
The most recent UCAS data reaffirms the attractiveness of higher education in the UK, with total acceptances for 2019 increasing by 1.5% to 541,240. This jump comes off the back of a 1.6% rise in applications.
On a domicile basis, the sector continued to show strength in the face of Brexit, with acceptances from non-EU students increasing by 6.9% from a year earlier. This compares to a jump of 5.0% reported in 2018.
However, growth in acceptances from EU (excluding UK) students declined by 0.2% in 2019 (2018: +3.6%), albeit acceptances from non-EU students equate to just 5.9% of the total.
Despite an overall fall in the number of 18-year-olds, acceptances from UK students increased by 1.1% in 2019, the first year-on-year rise since 2015. With a cyclical recovery in the population of 18-year-olds on the horizon, growth prospects remain positive for this group.
Whilst the national outlook is mostly buoyant, headline figures hide large institutional variations.
However, demand is only ever one side of the equation, with supply growth playing a significant role in determining the attractiveness and competitiveness of a location from an operator's perspective.
For example, the challenging market fundamentals in cities such as Sheffield become clear when you consider the pace of growth in PBSA, relative to the rise in demand for accommodation.
Source: hesa.co.uk, ucas.com
At first glance, a rise in full-time students of 10.5% between 2012-2017 clearly should be taken as a positive. However, growth in demand for accommodation has been more than offset by an increase in supply.
Between 2017-2019 alone, StuRents estimates that total supply (HMO & PBSA) increased by 14.6%. Assuming demand grew over this period by a similar amount to the preceding 5yrs, then the number of students looking for accommodation would have increased by just 4.0%.
The spread between supply and demand growth becomes even more apparent when looking forward. By inferring future bed demand from historical student growth, and comparing this to the PBSA pipeline in Sheffield, StuRents estimates that between 2017-2022, supply has the potential to increase by 16.4% (26.8% vs 10.4%) more than demand over the same period.
More worryingly, this level of oversupply assumes demand for accommodation continues to rise at has over the past 5yrs (c.2.0% p.a), however, the most recent UCAS data points to a potential slowdown in this rate of growth, particularly from non-EU students.
NB: The analysis above assumes all developments in the pipeline come to market and no change in the provision of HMO accommodation.
Conversely, applying this methodology to a location such as Exeter, it immediately becomes clear, which locations appear to demonstrate more positive supply vs demand fundamentals.
Of course, such fundamental analysis is just the first step in ascertaining the attractiveness of a location but provides a key insight into the fundamental market forces.
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