The Importance Of The International Student Market For PBSA | LOFT

The international student market in the UK is massive. Between 2017 and 2018, the UK had the second highest international student market in the world with 458,490 undergrads coming from overseas. Fast forward to today, and there are 538,600 internationals studying at our universities. That’s 22% of the country’s total student population.

The only other nation with a higher amount is the US with over one million international students. But given that the States are 40 times bigger than the UK, it’s not too surprising they have more international students.

Much like our country’s international student market, the UK is also No.2 in the world for PBSA investment outside of the US, a market which is worth over £55 billion to our economy.

Despite all the uncertainty around uni life, 2020 was the best year on record for PBSA investments in the UK. £5.77 billion was invested into student accommodation, an increase of nearly 6% on 2019’s figures according to Savills.

So, what does all this mean?

Traditional student housing is tempting fewer students every year. The value for money, lack of amenities and less focus on community-based living is driving them towards PBSA.

And for overseas students looking to form friendships, that is the real key factor. Community-based living is a necessity.

The international student market is too big to be seen as a second thought. We explore how much value foreign students bring, and why it’s so important to PBSA.

WHAT ARE THE BIGGEST INTERNATIONAL STUDENT MARKETS?

In the UK, the Chinese student market makes up nearly a quarter of all international students, totaling over 120,000. According to Times Higher Education, there are nine reasons why so many Chinese students choose to study abroad. In terms of PBSA, the four key points to pull out are:

• An enriched student experience
• To meet a diverse range of people
• To develop their language skills
• A better educational environment

One of the main selling points of university in general is the social aspects. PBSA provides students with the means to create stronger, tight-knit groups, as communal areas are hubs where students will kick back and relax after a tough day hitting the books.

Lizzie Healey, LOFT’s Student Sales Manager, said:

“International students drive demand and higher standards in accommodation. Living thousands of miles away from home means the requirement for student-focused design is more prevalent than before, with a focus on coworking, amenity spaces and comfortable living areas.”

These spaces need to be inclusive, though. UK students and internationals will need to feel at home in community areas, which is easier said than done in a post-Covid era.

Some students may be a little more wary, especially if catching the virus means quarantining. In certain scenarios, this could lead to international students missing flights home to see their families or possibly having to lose out on lectures and seminars when they return to the UK because they have to be isolated.

Interior design will play a huge part in ensuring spaces are inclusive but still safe for students who are easing themselves back into socialising slowly. This can include:

• Making sure seats are a touch further away than usual
• Placing hand sanitising stations in high traffic areas
• Ensuring amenity spaces have plenty of windows to circulate fresh air

The second and third biggest senders of international students are India, totaling 26,685, and the US at 20,000. Interestingly, only four countries in Europe are in the UK’s top ten international student markets. Italy, France, Germany and Greece take spots six, seven, eight and ten respectively.

This suggests that UK universities have a much stronger pull on the Asian market than the EU market, as Thailand and Malaysia are in the top five.

Ashurst believes the weakening of the pound may have been a driving factor in this development. As it stands (July 2021), the exchange rate for Euros to pound sterling is approximately €1.16 to £1. Because they are so closely in line with each other, it’s likely EU students aren’t seeing as much value for money in the UK as the other foreign student markets.

WHAT MAKES PBSA APPEALING TO THE INTERNATIONAL STUDENT MARKET?

In one in six non-EU cases, it’s the students’ parents or wider family who pay for accommodation, so PBSA operators and developers need to appeal to parents first and create spaces that students don’t want to leave.

This is especially true for first years where 72% of students admitted their parents were an influencing factor when it came to finding suitable accommodation, regardless of whether the student was from the UK or abroad.

Parents look at four key aspects when finding a place for their children to live:

• Quality living conditions
• Safe, central locations
• Value for money
• A dedicated learning environment

By developing your PBSA so that it meets a parent’s needs for their children, you’ll persuade one of the biggest influencers that your accommodation is the right one. And once the parents are onboard, you can put all your effort into making sure international students will enjoy living in your building.

JLL’s UK Student Housing Report found that wellbeing is a high priority. For many, going to university will be the first time these students have moved away from home, which can be a nerve-wracking experience especially for those coming overseas and adapting to a new culture.

PBSA schemes need to prove their developments are safe, secure and have plenty of communal areas and leisure amenities for the international student market. This helps students settle into their new environment and creates opportunities to form friendships. In particular, communal areas will now need to be more spacious to accommodate any potential anxieties surrounding Coronavirus.

One of the biggest issues UK PBSA providers face is the constant change of residents. International students are statistically more likely to stay in the same accommodation, according to a joint report from Knight Frank and UCAS. 42% said the option to stay in the same place for more than a year was “extremely important,” which suggests many are looking for accommodation to last for the duration of their degree course.

79% of the international student market living in private PBSA are happy with their accommodation. 89% said value for money was “extremely important” to them, but only 68% actually rated their PBSA as good or excellent. This suggests there is a lot of room for improvement across the PBSA sector in retaining student residents.

Giving weight to this is the fact 72% of all first year students planned on moving into mainstream private rental accommodation in their second year according to the same report. In order to retain and attract new residents, some PBSA providers offered students incentives and deals. 40% of first-year students were offered incentives, and 16% said they would not have chosen to stay without it.

THE FUTURE OF THE INTERNATIONAL STUDENT MARKET ON PBSA

Data from UCAS shows a 6% year-on-year increase in the number of university applications from international students in the 2019/2020 academic year.

Even the Coronavirus pandemic didn’t have a huge impact on the 2020/2021 numbers, as many international students still see the appeal of coming to the UK for Higher Education.

It’s not surprising when our universities are world-leading, and the UK’s unique culture is celebrated across the world. 

In March last year, 41% of the PBSA industry surveyed by The Class of 2020 predicted that business would be back to normal within one semester. While we’re not quite back to normal over one year later, it’s clear social distancing measures and the Covid-19 vaccination programme in the UK is putting everything back on track.

Catering to an international student demographic means actively supporting community-based living while remembering to include enough amenities to ensure students are getting value for money and staying safe.

By listening to what students (and their parents) want and providing them with the right interior design solutions in communal spaces, PBSA operators and developers should expect a very healthy flow of residents keeping their PBSA schemes running near capacity for years to come.