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Student Accommodation Research: Q1-2021 Market Update

Posted by Richard Ward

Lettings Demand
In Q1-2021 (Oct-Dec), tenancy agreements executed by operators using StuRents' proprietary software show that the most popular size of property or cluster was 6 beds, which equated to 26.3% of the total. In terms of price points, rooms that cost between £121-£130 per person per week (pppw) were the preferred choice. Of all those contracts signed via the platform, 20.9% were for rooms at this price point.

Figure 1
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Source: StuRents.com

Figure 2
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Source: StuRents.com

Planning
Planning application activity rebounded in the final quarter of last year, with more than 11,000 beds submitted nationwide. Whilst this represents an increase in activity compared to the previous quarter (4,778 beds), Figure 2 highlights that planning is still down by historical standards.

Some of the most notable schemes put forward in the last three months of 2020 include a 425-bed development in Manchester submitted by Watkin Jones Group, which contains a mix of studios and clusters, as well as a significant 723-bed development in Birmingham lodged by Fusion Birmingham Devco. The single largest application put forward was a 1,069-bed, all studio, development in London. Located in Marsh Wall, the development was proposed by Tide Construction.

Other notable updates include two new developments in Dundee totalling 539 beds, which represent the first meaningful applications submitted to Dundee City Council since 2017.

After a deluge of new developments in Coventry, planning activity in the city has slowed, albeit it remains substantial. In 2020 just over 2,500 beds were submitted, compared to more than 5,000 in 2018.

Figure 3
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Source: StuRents.com

UCAS 2020 Acceptances
The latest UCAS (ucas.com) data highlights that UK higher education remains an attractive choice, although in 2020-21, the positive figures have not always translated to healthy occupancy levels.

Looking ahead, continued growth in demand remains positive for the market in the long run, however, the lettings cycle for 2021-22 is expected to be protracted compared to previous years, as highlighted by StuRents' tenancy and search data.

At a national level, total acceptances jumped by 5.4%. Meanwhile, those from non-EU domiciled students increased by a massive 16.8% year-on-year. Acceptances from UK students and EU (ex-UK) domiciled students also grew, increasing by 4.5% and 1.9% respectively.

On a locational basis, some of the cities that recorded the largest year-on-year increases in total acceptances include Durham, Exeter, and Manchester. Whilst Guildford, Plymouth and Coventry recorded some of the largest declines.

Isolating yearly acceptances from non-EU students, the best performing locations were Manchester (+27.8%), Glasgow (+33.5%) and York (+32.1%). Whilst leading up the rear were Guildford (-30.3%), Colchester (-29.5%) and Lincoln (-25.0%).

Government Update: International Education Strategy

In other news, on Feb 9th the government released an update to its International Education Strategy as it looks to increase the value of education exports to £35 billion per year and the number of international students hosted in the UK to at least 600,000 per year by 2030.

Some of the highlights of the policy include:

- The appoint of the International Education Champion, Sir Steve Smith

- The introduction of a new Graduate route for international students. This will provide a period of 2 years for undergraduate or master's students (3 years if studying at PhD level) to stay in the UK to work, or look for work, after they have completed their degree in the UK.

- The introduction of a new points-based immigration route, with Student and Child routes. These streamline the immigration process and improve the application process for international students

- A new international education scheme, the Turing Scheme, which will start in September 2021. This will provide funding for around 35,000 students in universities, colleges and schools to go on placements overseas

Other actions on the horizon include:

Enhancing the international student experience from application to employment: the government will work with sector bodies such as the Universities and Colleges Admissions Service (UCAS), the UK Council for International Student Affairs (UKCISA), the Office for Students (OfS), Universities UK International (UUKi) and the Confederation of British Industry on areas such as:

- The student application process for international students
- Graduate outcomes and employability
- The academic experience of international students
- Alternative student finance

The document in full can be found here.

Department for Education Study on the impact of Brexit on UK higher education

Another recently released document, this time from the department for education, has analysed the expected impact that Brexit will have on UK higher education. The study focuses on the impact to EU student recruitment due to the loss of home-fee status and other policy changes.

In summary, the study suggests that full-time first-year EU undergraduate student numbers will be impacted both in the short and long-term. It is estimated that removal of tuition fee support for EU domiciled undergrads could lead to a decrease in enrolments of 38%.

When considering all proposed policy changes, such as restricting the right of EU students to work in the UK and the loss of tuition fee support, the combined impact could lead to a reduction in first year EU students of 57%. Depending on the institution, the impact could range from -36% to -69%.

The study can be found in full here.

The extracts above have been taken from our Quarterly Market Reports covering all major university towns and cities across the UK and Ireland.

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About StuRents:
- StuRents is one of the leading proptech partners in the UK student accommodation space
- StuRents operates StuRents.com, the largest student-centric accommodation search platform, listing over 750,000 bed spaces nationwide
- Beyond search, StuRents facilitates integrated online tenancy signing, tenancy payments and app-based tenancy management solutions
- This unique, vertically integrated end-to-end solution underpins StuRents' data insights and research capabilities