UCAS Student application numbers – analysis from a Student Accommodation perspective

Yesterday, UCAS announced final student application numbers for the 2012/13 academic year; the first year in which higher tuition fees take effect. The results confirmed a 7.4% drop in applications and were firmly in line with UNITE’s previously announced expectations of a 5-10% fall.

The reduction in applications means that 2012/13 applicant numbers are broadly in line with those of two years ago, for the 2010/11 academic year. At this level, demand for university places still outstrips supply by approximately 32% and means that more than 156,000 students applying to study in 2012 will fail to secure a place. 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.

Within the overall numbers, applications from non-EU students, a key customer segment for UNITE, increased by 13.7%, demonstrating the continued appeal of UK Universities overseas. 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.

There will be varying implications of the final applications outcome at a city and University level due to the various policy mechanisms introduced by the Government, such as the ring-fencing of students that achieve AAB or above at A-Level and incentives for Universities charging less than £7,500 per year for a degree course. These factors are generally expected to benefit those Universities with a stronger reputation, many of whom UNITE has a long-standing relationship with. This is further supported by UNITE’s own research conducted in December 2011 with 2012 applicants. This shows that the majority of school leavers still view university as an attractive proposition for the best chance of a secure future, with 79% of respondents stating their willingness to pay higher prices for good academic reputation, suggesting that students are still keen to select their university on its ‘brand’ or reputation, rather than price.