Irish Government to Part-Fund University Housing
25th Nov 2022
Latest UCAS Numbers
The latest data covering the 2021 cycle from the Universities and Colleges Admissions Service (UCAS), reveals insights into the applications and acceptances at each higher education provider in the UK.
Of particular note, 2021 saw a year-on-year (YoY) decline in total acceptances of 1.5%, representing 8.4K fewer student acceptances. This marks the second-largest percentage decline in acceptances recorded by UCAS to date. The largest of which was observed in 2012, a year in which acceptances declined by 5.5% (-27K).
The year-on-year decline can be solely attributed to a dramatic fall in students coming from the EU. The number of EU-domiciled student acceptances fell by a sizeable 50.4% in 2021, representing a drop of 16.3K students year-on-year. This is likely a direct result of Brexit, which resulted in EU students losing their 'home fee status'. The change in policy means that all students from the EU starting a further education course in the UK after July 2021 will no longer benefit from paying the same tuition fees as UK students. Another likely factor contributing to this harsh drop is undoubtedly the difficulties in international travel caused by the restrictions implemented throughout the pandemic.
Comparatively, acceptances from UK domiciled students continued to rise albeit at a slower rate in 2021. The number rose by just 1.4%, representing an additional 6.6K acceptances. This follows on from an increase of 4.5% recorded year-on-year in 2020. Since 2012, acceptances from UK students have risen by 21.1%.
Non-EU international student acceptances also continued to rise, with the number reaching a high of 54K students, a rise of 2.4% year-on-year. This was also the greatest proportional increase YoY of all domiciles. Since 2012, yearly acceptances from non-EU internationals have risen by 52.6%, equating to an additional 18.6K students in 2021.
Figure 1: UCAS Acceptance Growth by Domicile
In terms of acceptances by tariff; only higher tariff providers reported year-on-year growth. The number of acceptances rose by 1.3% year-on-year, reflecting an increase of 2.3K students. This compares to the larger increase seen in 2020 when acceptances at this group rose by 13.3% year-on-year (+20K).
On the other hand medium and lower tariff providers, both reported declines of 3.7% and 1.9% respectively.
The long term trend has also been favourable for higher tariff providers, with yearly acceptances rising by 43.3% since 2012. This compares to medium and lower tariff providers which saw numbers grow by 18.3% and 8.8% respectively.
For more information on the fall of EU student applications, please see our latest posts here;
PBSA Supply Growth
Despite the temporary disruptions caused by the pandemic, the PBSA sector in the UK continued to show strong growth in 2021, with over 20,000 new PBSA beds delivered to the market in time for the 2021-22 academic year.
Unsurprisingly, the city with the highest uplift in PBSA beds was London. An additional 3,216 units were introduced to the market for the current academic year, representing a 3.7% rise year-on-year. Sheffield had the second-largest absolute increase, securing an additional 1,850 beds in 2021, which saw the total number of PBSA beds expand by 6.5%.
Whilst Brighton saw the third-largest absolute increase of PBSA beds in 2021, it was the city with the greatest overall percentage increase year-on-year, growing by 20.4%. Lincoln and Swansea also showed significant percentage rises of 15.8% and 12.1% respectively.
Looking further at the growth potential in the coming years, the largest pipeline continues to be London, which could see an additional 15K beds over the coming years if all developments are delivered.
At an absolute level, Nottingham possesses the greatest pipeline outside of London. Thus could see almost 10K beds added in the next few years, reflecting the vast interest Nottingham has had from investors and developers recently. If the entire pipeline were to be delivered, PBSA could expand by 37.9%.
It is extremely unlikely that all developments in the pipeline will come to fruition. It does however give an insightful view into the trends in the student accommodation market in the UK.
Continued interest from investors in the PBSA sector has been apparent in 2021 despite the uncertainties surrounding the pandemic. Whilst the sharp fall in acceptances from EU students in 2021 will undoubtedly impact the addressable market in coming years, the market, which includes HMOs, will continue to benefit from positive macro trends.
There was a slight decline in planning application activity in Q1-2022 (Oct-Dec), with a total of 4,300 beds submitted. This compares to over 6,800 beds submitted in Q4-2021, representing a decline of 37.0% quarter-on-quarter. Comparatively, the number of submitted beds is down 64.1% from Q1-2021, when almost 12,000 beds were put forward for planning approval.
Key updates - Submissions
1. Nixon Homes - 689-bed Exeter scheme in Heavitree
2. Get Living Group - 687-bed Glasgow scheme
3. Latimer Developments Ltd - 362-bed Leeds scheme in Kirkstall Road
4. McLaren Property - 318-bed Nottingham scheme
Key updates - approvals
1. Sydney Freed (Holdings) - 837-bed Bristol scheme in Dalby Avenue
2. Godwin Development - 692-bed Nottingham scheme
3. Fusion - 589-bed Portsmouth scheme
4. Watkin Jones - 526-bed Birmingham scheme
The total pipeline in the UK now stands at 103K beds, with over 71K beds benefiting from planning permission.
Unit Mix Demand
October 2021 marked the start of the 2022-23 season. The demand during this period was heavily skewed towards the larger sized clusters, with 4-beds and above taking up a 68.6% share of all searches on StuRents. This reflects the early house-hunting trend that we typically expect to see from domestic students at the beginning of the letting cycle.
In comparison, searches for 4-bed clusters and above equated to just 22.0% of the searches performed in the previous quarter (Jul-Sep), with demand heavily skewed towards studios and 1-bed flats.
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