As the mist begins to clear from Brexit there have been some
truisms about Britain that have inevitably
re-emerged. Things usually work
out in the end is one that appears to be bearing true
as politicians, bankers and leaders begin to come to an agreement
about the best economic strategy moving forward. Positive news
emerges with increasing frequency from the financial centres as the
FTSE climbs and Sterling recovers slowly and tentatively. The large
issues seem to be getting addressed in reasonable time and
strategies are making themselves clear. Not everything has been
dealt with quite so smoothly though.
One of the big issues looming on the horizon is international
students and their right to live, work and study here in the UK.
With one of the biggest international student communities in the
world Britain needs to formulate a plan to accommodate these
students and ensure a seamless transition for them.
A ‘Leave’ vote, many argued, could upend British higher education
by treating students from EU nations the same as other
international students instead of as near-equals to Brits
themselves. That change could hike tuition fees for EU students and
cut them off from the UK’s generous loan terms, effectively serving
as a deterrent for such pupils considering pursuing a British
education as they access loans based on the UK’s membership in the
bloc, which is now in post-Brexit limbo.
In the lead-up to the UK’s European Union referendum, UK
university leaders were among the most ardent about remaining in
the EU. Under the EU’s “free movement” principal, students from
member countries have the same access to universities in the UK as
Brits themselves. They apply the same way, pay the same tuition
fees (now some £9,000 per year), and rely on the same UK loan
facilities, whose terms—that borrowers only have to pay back loans
once they reach annual earnings of £21,000—are generous, at least
compared to U.S. standards. There was a fear that if the UK exited
the EU, students from other EU nations would lose those privileges
and be thrust into the same pool as other international students
who face higher tuition fees and don’t enjoy the same right of
access to the U.K.’s loan program.
Luckily there doesn’t seem to be any suggestions that there will be
a decrease in university applications for the coming academic year
and no real suggestions that there will be a significant drop in
subsequent years either.
One issue for students recently has been the noticeable lack of
quality accommodation and this has been largely addressed thanks to
private investment in the sector. Large projects are now appearing
at the majority of large campuses around the country. Typically
requiring lower immediate capital than normal off-plan properties
the student accommodation projects have proved popular with
investors as they see high yields and good tenancy rates with high
demand. As the schemes are becoming more popular the news that
students aren’t set to be too badly effected will reassure
investors that the student property market is still sound with good
returns.
In a recent report from Knight Frank about specialist property
investment it was revealed that most investors now see student
property and accommodation as the safest asset class and where they
plan to invest most heavily in the near future. Respondents to the
survey were asked “If you are planning to increase your exposure to
specialist property, which sector(s) will you be targeting?” and
70% responded that they would be investing further in student
property. They were also asked “Which (if any) of the following
specialist property sectors are you currently exposed to?” with a
massive 80% responding that they were already invested in student
property.
The expectation among many is that in the medium term the economy
will take some time to readjust itself and find a new natural
level, whether that be through stocks or currency rates. As these
fluctuations occur it’s normal for risk-averse investors to seek
safe positions for their long term goals and property often offers
this environment. Figures show that as property becomes more
diverse so does investment strategy and with the student property
market currently facing a large supply and demand deficit capital
growth and yields are increasing impressively.
Regardless of the result things have been mainly ‘business as
usual’ and this seems to indicate much of the same. As with other
sectors affected things aren’t simple but, broadly speaking, we can
expect things to continue in much the same vein and in many cases,
actually improve.
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