Bristol-based student accommodation specialists Unite insists the decline in university applications won’t prevent it achieving healthy rental growth this year.
The UK’s leading developer and manager of student accommodation said the 7.4% decline announced by clearing system UCAS for the 2012/13 academic year – the first in which higher tuition fees take effect - will not translate into a reduction in student numbers.
The reduction in applications means that 2012/13 will be broadly in line with those of two years ago, with demand for places still outstripping supply by nearly a third. Unite also said that more than 156,000 students applying to study this year will fail to secure a place.
In a statement to the London Stock Exchange Unite said: “Consequently we do not expect the decline in applications to translate into a reduction in actual student numbers. Based on our current reservations for 2012/13, which are in line with the same point in 2011, we remain confident of achieving rental growth of 3-4% for the year.”
Applications from non-EU students to UK universities, a key market for Unite, increased by 13.7%. Unite heavily over-indexes international students, particularly in its London portfolio, and this continuing trend supports the group’s business model and customer acquisition strategy.
It also said Government initiatives, such as ring-fencing students with AAB grades or above at A-Level and incentives for universities charging fees of less than £7,500 a year, will benefit universities with stronger reputations. Unite has long-standing relationships with many of these universities.
Unite’s own research in December shows the majority of school leavers still view university as an attractive proposition for the best chance of a secure future with 79% willing to pay higher prices for good academic reputation. Unite said this suggests students are still keen to select their university on its 'brand' or reputation, rather than price.
