Recent developments concerning international students in the United States, particularly President Trump’s efforts to restrict their entry to institutions like Harvard, could have significant ripple effects across the Atlantic.
President Trump’s administration has taken a firm stance on international student visas, with a recent executive order suspending the entry of foreign nationals seeking to study or participate in exchange programmes at Harvard. While legal challenges have temporarily blocked some of these measures, the overarching message of uncertainty and restriction from the US administration is clear. This has led to concerns among international students and their families about the stability and welcoming nature of the US higher education system.
Historically, the US has been a magnet for international talent, with its prestigious universities attracting students globally. However, if this perception shifts due to perceived unwelcoming policies, students may begin to look elsewhere. The UK, with its world-renowned universities and English-speaking environment, stands as a prime alternative.
In the event that there is an influx, the issue of the UK’s purpose-built student accommodation (PBSA) housing stock is a critical concern. The UK student accommodation market is already characterised by a significant supply-demand imbalance. A sudden and substantial increase in international student numbers could exacerbate this imbalance, putting immense pressure on an already constrained market. While new developments are ongoing, the rate of delivery often lags behind the growth in student numbers, creating a persistent shortfall.
The PBSA sector has historically offered attractive rental yields and stable demand, making it an appealing asset class for investors. Increased clarity (or the perception) on a growing international student market could provide the confidence required to de-risk new developments and secure funding. Investors thrive on predictable demand, and a clear signal of an incoming wave of international students could unlock projects that are currently on hold.
However, several formidable barriers to development in the UK persist, regardless of demand. Funding remains a key challenge, with rising interest rates and economic uncertainty making it harder to secure affordable finance for large-scale projects. Furthermore, the introduction of the Building Safety Act has brought about new regulatory hurdles.
The Act, implemented to enhance building safety standards post-Grenfell, introduces more onerous requirements, particularly for ‘Higher-Risk Buildings’ (those over 18 metres or seven storeys). These new approval gateways add significant time and cost to development timelines – with some developers projecting an additional twelve months plus for delivery. The Building Safety Levy, applied to new residential developments of a certain size, including PBSA, further increases costs and can impact the viability of schemes, particularly marginal ones.
Planning constraints also continue to be a major bottleneck. Obtaining planning permission for developments can be a protracted and complex process, often facing local opposition and lengthy approval times. This slow development cycle reflects systemic inefficiencies rather than market failure. The rising cost of land and construction materials further pressures the viability of schemes, making it challenging to deliver affordable accommodation while still generating a return for investors.
President Trump’s recent actions regarding international students in the US could indeed trigger a redirection of talent towards the UK – however, the UK’s PBSA market continues to face complex interplay of opportunities and challenges. The increased demand would undoubtedly provide a strong incentive for developers and investors. However, without proactive measures to ease the constraints that developers are already facing, the UK risks being unable to fully capitalise on this potential shift in global student mobility, leaving a significant portion of any incoming international students facing a persistent accommodation crunch.
This article was originally published by PBSA News: Could Trump's international student stance reshape UK's PBSA landscape? - PBSA News
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