Challenges for landlords and universities as overseas student visa numbers drop
The UK's universities may face financial difficulties because of a big decline in international student visa applications, research reveals.
The findings from the Institute for Fiscal Studies (IFS) show there were 25,200, or 17.1%, fewer overseas student applications for visas in August compared to August 2023.
This continues a trend seen in recent months, with a total of 55,500, or 16.6%, fewer applications received in the year to date, according to Home Office data.
The fall in applications is attributed to a change introduced in January 2024 that prevented most students from bringing their dependents with them, making the UK less attractive for some.
Universities may not rely on international students
Kate Ogden, a senior research economist at the IFS, said: "The latest figures on student visa applications – down by one-sixth compared with last year – suggest that UK universities may no longer be able to rely on recruiting ever-increasing numbers of international students to make up for real-terms falls in the resources available for teaching domestic undergraduate students.
"Much of the sector is in reasonable financial health and should be able to adjust."
She adds: "But for some less selective providers, which rely heavily on international student fees and are facing greater competition for domestic students from more selective competitors, the next academic year could be a difficult one."
Could impact university finances
With a new academic year, universities are expected to see fewer international students enrolling, which could impact their finances.
In recent years, international student fees have become a crucial source of income for UK universities, offsetting falling funding for domestic undergraduate students.
The IFS says that in 2022-23, the income from overseas students was £10.9 billion – which is a fifth of all universities' income.
The organisation also warns that while many universities are in reasonable financial health, less selective providers that rely heavily on overseas students may face challenges.
It warns that the institutions most at risk are those that have also seen a decline in domestic student applications.
Slowdown in international student visas
The chief executive at London Higher which represents 50 universities and colleges, Dr Diana Beech, says that a slowdown in international student visas could bring 'significant economic costs'.
She warns that some higher institutions in the capital are struggling to recruit while established universities are doing well.
But any drop in numbers will create serious financial difficulties for a vulnerable institution, she warns.
On Twitter/X, Dr Beech wrote: "London institutions are talent pipelines for many vital industries, which support the whole UK economy, so the consequences of a London institution failing could be nationwide."
A spokesperson for the Home Office said that applications to study in the UK peak between July and September.
They added that the data will be examined in the autumn to find out what impact, if any, the changes made to the student visa system have had.
'Challenges for student landlords'
The managing director of Accommodation for Students, Simon Thompson, said: "The decline in international student visas could pose significant challenges for student landlords who rely on this market for their income.
"It's crucial for universities and landlords to work together to find solutions that mitigate the impact of these changes and ensure a stable housing market for students."
He added: "The drop in UK student applications for some universities will also be a worry for landlords.
"The IFS is predicting that the next academic year could see some universities struggle - but that also impacts on the student accommodation sector and the government needs to act now before it's too to find a resolution."
