Effects of Dependent Visa Reforms on UK & Student Housing

Introduction

“The UK is a top destination for the brightest students to learn at some of the world’s best universities. It is time for us to tighten up this route to ensure we can cut migration numbers and meet the government’s pledge to the British people to cut net migration. This is the fair thing to do to allow us to protect our public services better while supporting the economy by allowing the students who contribute the most to keep coming here.” said Suella Braverman, the Home Secretary of the United Kingdom shedding light on the UK dependent visa reforms.

The Government of the UK published the UK’s International Education Strategy (IES) which aimed to increase the enrollment number of international students for higher education (HE) to 600,000 per year in the UK. However, for this to be possible, the demand for student beds needs to meet the supply indefinitely. With the student housing crisis in its prime as of 2023, the UK government had different plans.

The British Home Office announced the curbing of UK dependent visas prohibiting students from bringing their family members to the country. According to the Business Standard, 486,000 student visas were issued, with net migration reaching an all-time high of 504,000 with a 750% increase to 136,000 migrants being dependents of students enrolled for higher education in the UK. This blog aims to examine the cause and effects of these reforms on the UK as well as the global student housing market.

Curbing UK Dependent Visas: The Cause

In an attempt to deliver a more fair and effective immigration system and preserve the national interest of the UK was prioritised to reduce annual net migration, only allowing dependents of students enrolled in integrated courses like PhD or research-based master programs. The UK dependent visa’s new rules are scheduled to come into effect starting January 2024.

In 2022, Nigeria witnessed a significant rise in the number of dependents (60,923) of students sponsored under study visas, which was a notable increase from 1,586 in 2019. Following Nigeria, Indian nationals had the second-highest number of dependents, with an increase from 3,135 to 38,990. Collectively, the top five nationalities (Nigeria, India, Pakistan, Bangladesh, and Sri Lanka) received nearly 120,000 dependent visas in 2022.

The reforms for UK dependent visas had multiple objectives and here are the key reasons for these reforms:

1. Effective Immigration Policies: The government of the UK implemented reforms for dependent visas to control and reduce the overall immigration numbers in an attempt to regulate the inflow of migrants into the country.
2. Shortage of Public Resources: With the rising population in the UK due to a rapid increase in net migration rates, the demand for public resources, such as healthcare, education, and social services skyrocketed, leading to a shortage of these resources.
3. Economic Restraints: A large number of immigrants caused economic restraints. After the UK dependent visa reforms, the government intends to prioritize the employment of UK citizens and legal residents to contribute directly to the growth of the country. Moreover, the UK government aims to ensure that job opportunities are not taken by individuals brought in through family reunification.

Curbing Dependent Visas: The Effect on the UK

The UK dependent visa rules have brought about several changes that are predicted to affect the country as a whole. Here are the various potential impacts of the curbing of dependent visas on the country:

1. Demographic Composition: By debarring dependents who immigrate to the UK through family reunification, the demographic composition can be stabilised with the decline in population growth. This can reduce the pressure on public resources allowing for better allocation and prioritization of services for UK citizens and legal residents. Thus, augmenting the growth of the country.

2. Economic Impacts: Even though the economic contributions of immigrants were significant, the UK aims to promote national citizens to augment local businesses for contributing to the overall growth of the country.

3. Depletion in Cultural Diversity: With the recent reforms in the UK’s dependent visas, the restriction of diverse populations from around the world might deplete the multicultural student community and cultural diversity in the country. This is expected to diversely impact the advantages of cross-cultural interactions among students.

Curbing Dependent Visas: The Effect on Global Student Housing

While the main focus of the reform has been to predict the effect on the UK, there is another sector that is likely to be affected significantly. The student housing market in the UK has been an integral part of strengthening the backbone of higher education in the country. However, it has been projected that the impact of curbing dependent visas can be detrimental to the student accommodation market in the UK. Let’s see what are the effects of these reforms.

The Favourable Side - Positive Impact on the Student Housing Market

1. Increased Availability: The dependents of students enrolled in higher education in the UK seek private rentals for their accommodation. With less number of dependents migrating with the next pool of international students, it is expected that the availability of student housing beds will increase. Perhaps, there might be “more room for rooms”.

2. Potential Fall in Rental Pricing: The reform in dependent visas may be responsible for shifting the preferences of students from the UK to other alternate countries. Hence, this can result in a potential decrease in rental prices to open new doors for affordable accommodations in the country.

The Challenging Side - Negative Impact on Student Housing Market in UK

1. Alternative Countries for Higher Education: As the reduction of the diverse student population decreases, experts have predicted the downfall of international students to prefer the UK as a desirable destination for higher education. Saurabh Goel, CEO of amber - a global student housing solutions platform, has expressed concerns about the consequences of these reforms, “the recent proposal of restrictions by the UK government may deter students from choosing the UK as their study destination, leading them to consider alternative countries like Australia, Canada, and the USA”.

2. Hardest-Hit International Students: Many international students travelling to the UK for higher education consider this country due to its world-class universities. Students from India, China, Nigeria, Pakistan, and Bangladesh have collectively contributed the largest immigration numbers to post-study visa approvals.

For instance, Nigerian students accounted for the highest increase in the number of dependents of students enrolled in postgraduate studies in the UK. With the new restriction for UK’s dependent visas in place, it is evident that this influx will stop. However, the students bringing in the family will undoubtedly have to face an extra financial burden with new laws (Source: The Cable).

3. Challenges for Students with Dependents: The new bill presents challenges for students with dependents, particularly in finding suitable accommodation. The limited availability of accommodations specifically tailored for students with dependents in the market may make it difficult for these students to secure appropriate housing.

4. Potential impact on student housing sector investment: The curbing of UK dependent visas is expected to sprout uncertainties for the investors of student properties. For instance, purpose-built student accommodation investments are heavily driven by the influx of international student numbers. One might have to wait to understand if this will affect the development of new PBSA projects, or if cross-border investors flock to newer regions for better ROIs.

New Reforms Call for New Uncertainties?

The decision to restrict dependents from accompanying international students was driven by the country’s primary objective to control net migration, address the strain on public resources, and prioritize job opportunities for legal UK citizens. The UK dependent visa reforms have given rise to new market uncertainties that can either impede the market or be profitable. However, student accommodation providers must actively adjust to the changing requirements of the major international students immigrating from countries like India, China and Nigeria.

It is integral to introduce more flexibility in housing arrangements to cater to such multicultural groups and offer comprehensive support services to help students locate appropriate accommodations for themselves and their family members, especially after the new reforms. Student property managers in the UK should consult student housing experts to stay informed and updated about the pragmatic implications of these regulations. List your property with amber & get an overview of changing market dynamics via amber connect & our exclusive consultancy.

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