New student visa rules will boost London property market
International students will have two years to find a job after graduation, which will increase demand for London lettings and sales property
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The government announced this week that overseas students will have two years to find a job in the UK after they graduate.
This marks an increase from the current period of four months, which was introduced in 2012. Prime Minister Boris Johnson said the change was designed to help students "unlock their potential" and start their careers in the UK.
The move is likely to bolster demand for lettings and sales properties.
“International students are already a significant part of the London lettings market and make such an important contribution to the wider economy,” said Gary Hall, acting head of lettings at Knight Frank. “This change will only help to strengthen that trend further.”
Student lets accounted for 21% of all tenancies agreed by Knight Frank in the 12 months to the end of August 2019 in London. That was an increase from 17% over the previous 12-month period.
Meanwhile, the purpose-built student accommodation market is structurally under-supplied in the UK, particularly in London, according to James Pullan, head of student property at Knight Frank.
While there were 300,600 full-time students in London in the last academic year, there were only 82,500 beds in purpose-built student accommodation and the pipeline in the capital is shrinking.
“The government’s new position sends the important message that the UK is a welcoming place for international students,” said James. “The perception is that the UK has the best education system in the world and this change means that more students are likely to stay and contribute to the economy.”
The declining value of the pound has also contributed to growing demand in recent years, said James.
Based on the example of a non-EU student paying £13,500 per year to study Law, US students are saving approximately £2,488 since before the EU referendum, Knight Frank analysis shows. In India, the saving is £1,869 while in China the figure is £1,711. Similarly, EU students paying £9,250 to study Law, would save £1,595.
The extension of the time available for overseas students to find employment comes against the background of the government’s commitment to increasing international student numbers. Its Education Strategy, released in March, aims to increase international student numbers by more than 30% to 600,000 by 2030. It plans to generate £35 billion through tuition fees and other sources of revenue such as British schools with overseas campuses.
This week Oxford University was ranked first in a global league table of universities by Times Higher Education for the fourth year in a row.