Modern Universities Facing Squeeze From UK Government Clampdown On International Student Families

A revolution in levels of study alongside the introduction of the post-study work visa have provided many universities with the opportunity to significantly swell student numbers and open their doors to a more diverse and older demographic in recent years. This has been particularly evident at institutions incorporated in or after 1992 (formerly known as polytechnics or central institutions, now better known as new universities or modern universities), which have seen postgraduate student growth exceed 120% between 2016/17 and 2021/2022 and international student numbers grow 138% over the same period.

With postgraduate taught (PGT) tuition fees for international students averaging around £17,500 p/a – at least 50% higher than a UK student – this group has become an important income stream for many universities and an integral part of their business plan. However, the future growth of international PGT student numbers in the UK was placed in doubt recently when the Government, in an effort to curb net migration, announced changes to the student visa system which means that from January 2024, international students studying at this level will no longer be able to bring family members to the UK during their course of study. In addition, the ability of these students to switch to a work visa until their studies are completed will also be restricted.

This is no doubt a response to the surge in student dependent visas. In 2019 just over 19,000 people were accepted into the UK on a student dependent visa, by 2022 this had risen to almost 136,000.

This has been largely driven by two distinct groups – mature Indian and Nigerian students. Of the 107,710 Indian and 38,210 Nigerian students in the UK, 72% are aged 24 or over. This group accounts for practically three-quarters (74%) of the student dependent visas issued (Nigeria 60,923 visas and India 38,990). This student demographic is also overwhelmingly studying at PGT level (118,638), making them the most severely hit group under these visa changes.

The effects of the changes will be felt differently across the sector, with certain universities likely to be impacted more than others. Modern universities have the greatest exposure to PGTs from Nigeria and India, with over four in 10 students from these two nations. The universities of Glyndwr, Teesside, East London, Bedfordshire, Angela Ruskin and Northampton have the highest exposure to this group.

Cushman & Wakefield estimates that a 33% reduction in the number of students at the most exposed universities has the potential to reduce their overall income by 15%, whilst a 50% reduction could reduce income by 25%.

Despite the significant financial and recruitment implications of these changes, the overall impact on the PBSA market is set to be minimal. Fewer than 1% of beds nationally are suitable to serve students with dependents, with this cohort largely reliant on the local housing market. The changes do, therefore, have the potential to relieve pressures on local housing markets – especially in areas where PGT numbers have grown strongly in a short period of time.

While the changes may give pause for thought for some developers designing new PBSA suitable for such cohorts, it is equally arguable that the announcement has also shone a light on the fact that, in a stretched housing market, students with dependents – regardless of nationality – are not being adequately catered for.