The latest figures from UCAS show that for the 2017–18 academic year the number of full-time undergraduate applications made by the 15 January deadline have dropped 5% compared to the same period a year earlier.

This decline means fewer students are now applying for higher education in 2017 than at the same point in time during 2014.

The last time such a large year-on-year decline in full-time undergraduate applications was reported by UCAS was in 2013, when applications fell 6% year-on-year, to 558,820. This occurred after legislation was introduced to increase tuition fees to £9,000 per year for students starting university in the 2013 academic year.

Fig 1: Year-on-year change in full-time undergraduate applications by domicile

Source: UCAS

Applications from students outside of the UK but within the EU took an even greater hit. Full-time undergraduates from other EU countries have fallen 7.0% year-on-year, with universities such as Cambridge attributing the decline to Britain’s decision to vote in favour of Brexit in June last year.

Although UCAS expects a further 100,000 people to apply to higher education through the remainder of the cycle, the figures released for the 15 January deadline provide a good earlier indicator of overall student demand for the upcoming 2017–18 academic year.

By comparing the latest available data provided by the Higher Education Statistics Agency (HESA) (2015–16) we can estimate which cities and institutions are most exposed to a possible reduction in students applying from outside the UK.

StuRents analysed all university cities with at least 1,000 UK domiciled full-time undergraduates and found that despite London having by far the greatest number of full-time non-UK domiciled undergraduates, it’s St Andrews which is most reliant on foreign nationals.

As a percentage, St Andrews came out on top for the 2015–16 academic year with 40.1% of its 7,150 full-time undergraduates coming from outside the UK.

However, these were mostly non-EU students, which accounted for 2,315 of the 2,865 students domiciled outside of the UK. As the latest UCAS figures show, the number of students from outside the European Union are likely to fall far less than those from other EU countries, therefore St Andrew’s may be protected somewhat from a potential fall in admissions.

The cities that rely most heavily on full-time undergraduate EU students are Aberdeen, with 17.0% of its total full-time undergraduate students coming from other EU countries, followed by Colchester with 10.2% and Lancaster with 10.0%.

At the other end of the scale those cities least exposed include, Ormskirk with 0.6% of its full-time undergraduates domiciled from other EU countries, while Cheltenham and Stoke-on-Trent had 0.8% and 0.9% respectively.

Fig 2: Proportion of full-time EU-domiciled undergrads (excluding UK)

Source: HESA

In total student number terms, the capital has by far the largest number of full-time undergraduates from other EU countries. During the 2015–16 academic year, this stood at 16,415 students, well above Glasgow in second place with 3,760.

However, within the capital there are some big differences at individual universities.

Again, including those universities with at least 1,000 full-time UK undergraduates, it was The School of Oriental and African Studies which had the greatest proportion of its full-time undergraduates coming from other EU countries at 13.1%. This was followed by King’s College London and University College London which had 12.8% and 12.1% respectively.

Meanwhile at St George’s, University of London just 2.1% of its full-time undergrads are from other EU countries.

A reduction in the number of students attending UK institutions, as suggested by the latest UCAS figures, will not only negatively impact university funding through reduced fee income, but could also lead to a more competitive landscape for accommodation providers.

It’s therefore important for accommodation providers to fully understand local market dynamics. One example of this is understanding student budgets, which vary between UK and non-UK domiciled students, as shown in Fig 3.

Student budgets also help provide insight into the effective demand for a given bed space. Often demand is discussed at a university or city basis in terms of the total number of students. However, it’s more important to understand the effective demand for any given price range.

As Fig 3 demonstrates, to determine the actual demand for beds at a particular price, ignoring other factors such as location and facilities, the total number of students must be discounted by taking into account the proportion of students who can afford any given price point. This will provide a more accurate estimate of the effective demand for a particular bed space.

Fig 3: Proportion of students able to afford private accommodation

Source: StuRents Limited

Secondly, further insight into the market can be achieved from understanding enquiry seasonality.

The seasonality of searches not only varies between UK students and their international and European peers, but it can also vary between individual cities.

Against a year-on-year decline in full-time EU applications for the 2017–18 academic year, accommodation providers with bed spaces within the budgets of British students may wish to ensure their marketing strategy is aligned with the seasonality of UK student enquiries. This will ensure they can reach students, which may otherwise have been missed.

In addition to this, the type of enquiry also differs during certain times of the year, with cluster flats and shared HMO predominately the preferred search criteria at the start of house hunting season, and searches for smaller groups and individual lets coming later in the season.

With the latest UCAS figures reporting a significant year-on-year decline in applications from both UK and European domiciled students, it’s more important than ever to fully understand local market conditions to ensure an effective marketing strategy.

By analysing effective demand and enquiry seasonality, marketing budgets can be apportioned to the times of year when the demand for certain beds is at its highest, ensuring marketing campaigns have maximum impact.