Winners and Losers in 2021

Unipol Student Homes

The UK Student Accommodation Forum, Tuesday 13th April, 10:00am – 12:00pm

Theme: Winners and Losers

Guest Speakers: Martin Blakey (CEO, Unipol Student Homes); Martin Rushall (Independent Consultant); Katie Bell (Chief Marketing Officer, UCAS); Nick Hillman (Director, HEPI); David Feeney (Partner, Cushman and Wakefield); Paddy Jackman (Director of University Partnerships, Campus Living Villages UK)

Overview of developments in the sector with the easing of lockdown – Martin Blakey

  • The government have yet to inform students when they can expect to return to campus and to face-to-face teaching.
  • In terms of occupancy, Unipol Student Homes has seen a majority of students travelling home for Easter and then returning to their student accommodation, showing a desire from students to continue their studies and student living as normal.
  • A recent report by YouthSight found that 66% of undergraduate students said they have not received any financial reimbursement from their accommodation provider or university because of the pandemic, and 66% of students were still living in their usual term-time accommodation.
  • Nationally, Unipol found that 56% of students were living in their usual term-time accommodation currently.
  • The HEPI report also found that around 56% of students were not expecting to return to face to face teaching this academic year, student satisfaction with online learning was at 54%, and 63% of students said their mental health had been a little or much worse due to the pandemic.

Trends and Data – Martin Rushall

  • The total number of full-time undergraduate applicants for 2020 was 728,780, up by 22,300 (+3.2%) on 2019.
  • A weak jobs market as affected by the pandemic, and possibly Brexit, contributed to the increased interest in HE and an increased number of applicants. This sentiment was echoed by a UCAS study in which almost 50% of late applicants said that the pandemic had increased the likelihood of them applying, and for 8% it had been the sole reason behind their application.
  • COVID-19 travel restrictions have limited study abroad opportunities, further contributing to the increase in UK applicants choosing not to study abroad.
  • Non-EU applicants increased from 87,870 to 98,660, up by 10,790 or 12.3% to their highest ever level. Specifically, Chinese applicant numbers rose by 24%.
  • Brexit and the EU referendum have affected the numbers of EU students applying to studying in the UK, with expectations that these numbers will continue to fall.
  • High application numbers have also contributed to high UCAS acceptance rates by HEIs. 570,000 applicants were accepted in 2020, making this the second highest year for acceptances since 2013.
  • The government have lifted the temporary cap on student numbers.
  • In universities achieving a growth of 1000+ acceptances in 2020/21, Russel Group universities dominated the list. However, Leeds Trinity University and Buckinghamshire New University had an acceptance increase of 74.3% and 59.6% from the previous year. This is especially notable, as Leeds Trinity University had already seen an increase of 66% for 2019/20 compared to the year previous.
  • Post-92 universities have seen a considerable impact on their numbers for 2020/2021, with Coventry University and University of Bedfordshire both seeing a loss of over 2000 students compared to the previous year.
  • Martin Rushall noted that it is hard to find any correlation between recruitment performance on the one hand and either TEF ratings or mission group membership on the other. Russel Group membership is a clear exception to this.
  • In summary for the undergraduate sector, 2020/2021 has seen growth in applications of 3.2%, driven by lack of alternatives amidst the pandemic.
  • Leeds Trinity University looks to be the standout winner: a 74.3% increase in acceptances. Whereas the University of Bedfordshire (-43%), Heriot-Watt (-25%) and Coventry University (-24%) have seen a more negative impact due to the pandemic.
  • The Russell Group achieved 16% growth in 2020/21, significantly higher than the 5.4% registered for the sector – likely to be down to grade inflation and recruitment unfettered by SNCs. UCL continues to stretch its lead over the rest of the Russell Group and Southampton continues to lag.
  • Overall, UK full-time postgraduate student numbers increased by 10.5% in 2019/20 on the previous year. Growth has been fuelled by major rise in PGT students (+14%), PGR students by comparison decreased by 1.3%.
  • The post-graduate sector achieved 10.5% growth in 2019/20, the highest on record. For new FT PG students, the year-on-year rate of growth is higher still at 12.3%.
  • The driver of this expansion is the proliferation of taught programmes at postgraduate level.
  • For 2019/20, pre-92s – 4.8% growth; post-92s – 21.2%.
  • Total PGT student numbers up by 14% in 2019/20; PGR students down by 1.3%. According to first-year data, PGT entrants up by 15% in 2019/20; new research students down by 8.3%. In the international PGT market, India is gaining on China as a recruitment ground.

The UCAS Perspective – Katie Bell

  • There is a growing number of non-EU applicants - 85.6K non-EU applicants were recorded for 2021, showing a 17% year on year growth rate in this sector.
  • Comparatively, EU student applicants have seen a 46% year on year reduction with only 26K applications this year. This reduction is expected following the EU referendum and the current situation of student loans for EU students. Republic of Ireland applicants have risen by 26%.
  • An unprecedented demand has come from mature students, specifically in those pursuing medicine based courses. We are also starting to see growth in the number of school leavers and 18 year olds applicants.
  • In spite of the pandemic, growth applications from China (+21%), USA (+61%), India (+25%) and Nigeria (+47%) has been recorded.
  • Only a third of school leavers are applying to higher education in the North East of the UK, as compared to London where just over half of school leavers are applying to higher education, so it is clear more work needs to be done to bridge this gap.
  • Applicants awaiting provider decisions is up from 24% to 39%, which implies providers are slower in their decision making this year, possibly as a result of the pandemic and concerns around over-recruitment. Rejections are also up slightly by 1%, from 18% to 19%.
  • Decrease is EU applicants has driven more emphasis on marketing to domestic students.
  • The growth in demand from international students, especially from China, suggests a continuation in demand for studios and single-occupancy accommodation.
  • Most PBSAs now offer ‘no place – no pay’ so there is less risk for students booking early.
  • Sentiment from students who are still undecided on their places shows that they want: more information on accommodation generally and transparency on COVID-19 information, to see the accommodation in person, to connect with current students, and to feel reassured that they will make friends.

Nick Hillman, Director at HEPI:

  • The total number of students in Higher Education has been lower every single year since the high point in 2010/2011 until 2019/2020 when students numbers finally overtook this record, when looking at all students including part-time students and not just focusing on full-time students.
  • While rising numbers of 18 year-olds applying to higher education is forecasted to continue, this can only truly affect approx. 10%-15% of demand to come, while the true indicator of growth comes from the proportion of school leavers who possess the aptitude to desire high education qualifications and pursue university study. The desire to better themselves is the key factor. Continuation of grade inflation could have a large effect on these numbers.
  • We could see an increase in demand for post-graduate study, as the jobs market is turbulent and many students may have had their undergraduate study disrupted by the pandemic or strikes. This trend was also seen previously in the 2008/2009 recession.
  • The sector has had a certain level of pessimism in the wake of the pandemic, as it was expected by many that demand for high education would fall even within home students. In reality, demand has risen greatly as a result of the pandemic and student interest in higher education continues as other opportunities for prospective students dwindle as a result of travel restrictions and the effects on COVID-19.
  • Students’ views on the impact of Coronavirus on their higher education experience in 2021

Evolution of Supply - David Feeney

  • Looking at the evolution of supply from 2013/2014 to 2020/2021, university owned beds and nomination agreements have stayed at a consistent level, and long term on campus partnerships have seen some small growth. The number of direct let beds in the market has continued to grow exponentially since 2013, with a growth of 110%. The private sector currently provides over half of the beds in the market.
  • According to Cushman and Wakefield’s Accommodation Tracker report for 2020/2021: 42% of bed spaces are university owned, 37% are direct lets, 14% are nominated/leased, 7% are on campus partnership.
  • The private sector is taking on an even more important role as it continues to dominate bed space numbers.
  • Regionally: London has produced 2554 new beds in the last year, Leeds has 2000 new beds, Exeter has 1873 new beds dominated by UPP-University of Exeter, Sheffield has 1273 new beds, Bristol has 442 new beds, Coventry has 3727 new beds in a single year. This number would be closer to 4000 if it had not been for delivery delays caused by the pandemic.
  • In Coventry 41% of bed spaces were offered at a discount, 35% in Birmingham, 43% in Glasgow, and 31% in Sheffield. Glasgow’s heavy reliance on the international market and a recent influx in new supply in Sheffield may have contributed to these discounted beds.
  • Almost no discounting occurred in Bristol and Nottingham only had a small amount of discounting which occurred.
  • In terms of quality of bed spaces, where high quality accommodation would be graded at a 5 and poor quality accommodation at a 1, Cushman and Wakefield found that almost 40% of bed spaces rated at a 5 were discounted this year. This occurred when bed spaces were rated on the quality of the room itself and facilities. It is highly likely that this was due to a lack of international students taking up accommodation this year, as international students tend to produce demand for ‘premium’ or higher quality bed spaces.
  • The average prices of private en-suites and university owned en-suites were incredibly comparable this year with almost no difference between the two.
  • Premium beds have continued to show significant growth, with just under 30,000 across the country at the moment. Cardiff has suffered from an oversupply in premium beds with around 12% of all bed spaces being considered of the highest quality. David points out a trend that when the number of premium beds in an area grows to more than 5% of the area’s market, issues of oversupply begin to arise as there is usually insufficient numbers of students with the economic means or desire to pursue this kind of accommodation.
  • Across the UK, there is just over 200,000 first generation, or ‘poor quality’ beds and 85% of these are university owned. It is unlikely that universities will be willing to spend the estimated £2–£4 billion budget for refurbishment of these bed spaces.
  • While there has been an increase in supply of PBSA bed spaces, there has still been an increase in students living in HMOs with an estimated 780,000 nationally in the private housing market.