The international student is important to investment in the student property market, one of the country’s most attractive and popular asset classes at present.
Traditionally more affluent and looking for a high quality of accommodation, international students are increasingly the target of investors in the property market. And while the number of students has faltered a little in recent years in the wake of the rising tuition fees, international numbers have recently returned to an upward trajectory.
Across the world, studying overseas has always been an attractive option, but in the last 15 years it has really picked up pace. According to the Organisation for Economic Co-operation and Development (OECD), the number of people worldwide who study overseas has risen from 2.1 million in 2000 to almost 4.5 million in 2011. It is expected to hit five million by the end of 2015.
The UK is widely recognised as being one of the most popular places for students from other nations to study, and despite a slight fall in the number of overseas applications in 2012 and 2013, latest data from the Home Office shows that 2014 has seen a return to growth in the number of students coming to the UK from abroad. The prestige of being able to study at some of the best universities in the world, coupled with the fact that the quality of education provided in the UK means that there are always high numbers of people looking to study in the UK.
A drop in student applications overall was to be expected in the aftermath of the rising tuition fees from 2011, and the 7.6 per cent drop the following year was indicative of this. However, the numbers of students in UK higher education has been rising ever since, and this is largely down to the number coming from other nations.
For the 2014/2015 academic year, UCAS has reported that the number of students overall has increased by four per cent. This is spearheaded by the number coming from overseas. The volume of EU students coming to study in the UK has risen by 1,500 this year, a growth of eight per cent year-on-year.
Mary Curnock Cook, UCAS’ chief executive, said: “Alongside rising student recruitment in all UK countries, there is increased fluidity between them and a significant increase in students from the EU choosing to study in Britain.”
Each year, roughly one in ten of the half a million new undergraduates embarking on courses in the UK are from overseas, Universities UK has estimated. However, it’s not just undergraduate courses that are helping to boost the volume of foreign students in the UK.
According to Higher Education Funding Council for England figures published recently, 23 per cent of all people studying towards a masters degree in the UK are now from China – a massive proportion when we consider that only 26 per cent are from England.
The StudyPortals International Student Satisfaction survey has also predicted that the future is bright for the student investment sector. In the coming years, it estimates, the volume of students in the UK who have come from other nations will rise by 15 per cent.
Overseas students are vital to the UK economy, and Universities UK believes that the total off-campus spend amounts to £4.9 billion per year. In total, they bring an estimated £7 billion into the UK economy each year, showing just how integral overseas students are.
For this reason, it’s important that investment in the student property sector continues to pick up pace, in order to meet demand and make sure that international students continue to want to live and study in the UK.
In the past three years, investment in this asset has been strong. The £2.7 billion and £2.1 billion of money put into student properties in 2012 and 2013 respectively is expected to be overtaken in 2014, largely thanks to the strong quarter three, where £220 million of stock was under offer with another £360 million on the market.
And with UCAS reporting that the number of those coming to the UK from overseas is on the rise once again, it seems certain that this figure will increase into 2015, as student property, and the strong yields it offers, strengthens its position as one of the country’s most popular asset classes.