Education is an increasingly global marketplace. Students are more willing to travel abroad for the best educational opportunities and the UK is exceptionally well placed to welcome them.
The UK has over 160 higher education institutions across the UK, with five of those universities being in the top 20 higher education institutions in the world. This makes the UK very competitive with other destinations, with only the US able to compete on this level.
At the Guardian’s Higher Education Summit in London last month, the opening discussion on internationalism had plenty of encouragement for UK higher education. The Summit lead on the increase in international students highlighting that the UK does very well in international league tables and more international students are choosing to study in the UK.
UK universities in a powerful position
Universities are starting to notice how powerful they are in the global market and a recent British Council report has indicated that we expect an increase of 10% over the next decade. This takes the annual international student enrolments across UK university courses to over 30,000 by 2020 and universities are now spending millions in attempt to attract those students and their hefty tuition fees to their campus.
BBC News has reported that universities in the UK are competing to attract international students by investing millions of pounds into new buildings including campus hotels, an overseas student village for international students and higher quality bedrooms.
While facilities and the student experience are already compelling factors for overseas students choosing the UK, improving facilities for overseas students are planned by two-thirds of universities showing just how important international students are to the higher education sector.
A recent report revealed that 79 percent of universities have construction plans costing more than £5 million scheduled for next year. The survey reveals universities are pushing their budgets to construct image-boosting new buildings and to improve the quality of accommodation as the market shifts towards high quality.
Students expecting a high quality experience
International students prefer to live with other foreign students in purpose built student premises and will typically be prepared to pay for quality. Location is top of their list while security, learning facilities and student community also rank highly.
Ian Vickers of building firm Wates argued students are now expecting a quality of experience that reflects the high price they are paying. In order to remain competitive, universities are looking to deliver modern facilities that have the ‘wow’ factor while encouraging more efficient and collaborative use of space.
The British press has reported the increasing demand for high quality student property, which has created a lucrative investment opportunity for savvy investors. Particularly after the recent news that international student numbers are on the increase due to a rise in global mobility, greater wealth in emerging markets, prestige of UK higher education and internationally competitive fees.
While Eva Egron-Polak, secretary general at the International Association of Universities acknowledges UK universities are internationally attractive, she has urged institutions to keep a balance between being competitive with facilities and offering a high standard of education. A good balance of university collaborations is also vital according to Egron-Polak.
Should investors be concerned with the revolution in higher education funding?
According to industry experts, investors should not be concerned about the recent revolution in higher education funding and teaching. Michael Farthing, chairman of the 1994 Group of smaller research universities, states autonomy will make institutions less obsessed with lobbying the UK government and lead them to taking more responsibility for developing a high-quality student experience.
The good news for investors is that student accommodation is not as price sensitive to higher rents as accommodation is seen as a percentage of total spending on education. Many argue that the increased fees will see a ‘flight to quality’ and those looking to find accommodation that mirrors their investment into their education.
The rise in international students mirrors an investment across the student sector
It is a good sign that universities are investing millions into new buildings. As stated at the beginning of this article, one university plans to build an overseas village for international students whilst another institution is planning a joint venture to share the university grounds with a hotel, offices and private housing.
The student property market is certainly thriving. Politicians believe universities make a larger contribution to the economy and a globalising state than ever before. Student accommodation is expected to be in high demand now more international students are choosing to study in the UK and investors are following universities by grabbing the opportunity with both hands.