What do rising student numbers tell us about the UK PBSA market?
The number of students applying to and accepting places at UK universities rose this academic year, though there remain differences between institutions as the Higher Education market becomes more competitive. These trends will have implications on the demand for accommodation.
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The latest data on student numbers makes for positive reading, despite the pandemic. Applications from international students were strong this academic cycle, while changing demographic trends are already demonstrating strengthening domestic demand.
More than 728,000 students applied to start a full-time undergraduate course at UK universities during the 2020/21 academic year, according to end of cycle applications data from UCAS. This was nearly 22,500 more applicants than the previous year and only the second year-on-year increase in applications seen in the last five years.
In total, a record 41% of all 18 year olds in the UK applied for a full time undergraduate course, while there was also an uptick in the number of applications from outside of the UK, which climbed 7.5% on 2019 levels.
Higher application volumes supported a rise in total acceptances, with the number of students enroling on a university course up by 5.4%. The data suggests that initial fears of a downturn in enrolment – particularly from overseas as a result of campus closures – haven’t transpired.
That said, a deeper dive into the figures shows stark differences in demand for places at universities in different cities, and across different groups and tiers of universities.
Continuing a trend which has been evident since 2012, enrolment across higher tariff universities – which typically demand higher exam grades for entry – was up 13.2%. By comparison, medium and lower tariff universities saw acceptances increase by 3.7% and 1.1% respectively.
It means that while student numbers at lower tariff universities have remained flat since 2012, higher tariff institutions have seen numbers swell by 25% as students prioritise access to the higher quality courses available to them.
What next?
There are early indicators that student demand will rise again for the 2021/22 academic year, with January deadline data from UCAS pointing towards an 8.4% increase in applications compared with the previous cycle.
This rise is highest comparable year-on-year increase since 2010, and was driven predominantly by an increase in UK applications, which are 11.6% higher than last year. This rise coincides with an increase in the 18 year old population in the UK – the first time in six academic cycles where this has been the case.
Assuming current levels of participation continue, this will drive domestic demand, with UCAS predicting it will result in 90,000 additional UK applications by 2025.
Looking beyond the UK, applications from outside the EU increased by 17.1%, driven by strong demand from the usual recruitment markets such as China (+21.5%) and India (+25.5%). Applications from within the EU were down by almost 40%, a factor that is likely a result of changes to fees in the wake of Brexit.