by Matthew Neal, Director at Alternative Real Estate Advisors
For the UK PBSA market, University Clearing remains important for a number of reasons. Whilst the core university cities of London, Birmingham, Bristol and Manchester continue to see demand far outweighing supply of student property, other UK locations such as Edinburgh, Nottingham and Exeter have struggled more than expected with the speed of lease-up.
It is now fairly clear that International students have been put off by an unclear political stance on immigration and VISAs. A position exacerbated by the removal of dependant visas early in the year. Perhaps less publicised but equally as important to PBSA demand, has been the rising cost of living for international students, thanks to the strength of Stirling in recent months. If you take Nigeria as an example market, 12 months ago £1 GBP was worth N972 Nigerian Naria, now it is N2040. An increase of +110%. Having granted over 42,000 student visas in 2023 for Nigerian nationals, all data sources signal a reduction will be seen this year.
As of July 2024, Confirmation of Acceptance for Studies (CAS) issuance, an essential document from the Home Office for a successful Student visa application, was down by 42% year-on-year. Deposit payments were also down by 39% year-on-year. While Clearing will hopefully balance this dip in international demand, providers should start thinking ahead to the next academic cycle and take a forensic look at their booking and leasing journeys, their operational budgets, risks and opportunities and strategies to ensure they continue to achieve core occupancy for their assets, regardless of the clearing window.
