Top 5 Non-EU Source Countries for International Students and Their Impact on the UK Housing Market

The United Kingdom's higher education sector continues to exert a powerful pull on students globally, cementing its status as a premier destination for academic pursuits. However, beneath this surface of enduring appeal, the composition of the international student body is experiencing significant shifts. 

Recent data reveals a dynamic interplay: robust growth from certain nations counterbalanced by declines from others, a landscape shaped by evolving UK immigration policies, geopolitical currents, and global economic conditions. This changing demographic terrain presents a complex matrix of opportunities and challenges for stakeholders across the UK property market, particularly those invested in or operating within the student accommodation sector. 

The Changing Tide of International Students

The overall number of international students in the UK reached a record 758,855 in 2022/23, making up 26% of the total student population. However, preliminary 2023/24 data hints at a slight dip, influenced by evolving UK immigration policies and global economic conditions. These students contribute significantly to the UK economy, with the 2021/22 cohort alone adding an estimated £41.9 billion. This economic footprint directly fuels demand in the accommodation sector, making international student trends a critical watch point for property stakeholders.

Spotlight on the Top 5 Non-EU Source Countries

Based on the latest Higher Education Statistics Agency (HESA) data for the 2023/24 academic year, the top five non-EU sending countries are India, China, Nigeria, Pakistan, and the United States. Let's examine their recent enrolment trajectories and housing preferences.  

1. India: Recent Shifts After a Meteoric Rise

India became the UK's largest source of international students in 2022/23 and maintained this in 2023/24 with 166,310 students. This followed substantial growth, largely due to the Graduate Route post-study work visa. However, 2023/24 saw a 15% year-on-year decline in new Indian entrants, and 2024 visa issuance dropped 26%. This is largely attributed to UK policy changes restricting dependents for most postgraduate students.  

• Housing Impact: Indian students often show greater price sensitivity, considering Houses in Multiple Occupation (HMOs) or the most affordable Purpose-Built Student Accommodation (PBSA) options like non-ensuite or standard ensuite rooms. A majority (71%) target accommodation in the £150-£250 per week bracket. London hosts many Indian students, but they are also concentrated in other major university cities.  

2. China: A Strong but Evolving Presence

China is the second-largest source, with 149,885 students in 2023/24. Together, Indian and Chinese students comprised 48% of all non-EU international students in 2023/24. Recent data suggests a potential plateau, with a 4% decrease in new Chinese entrants in 2023/24 and a 6% decline in 2024 visa issuances. The dependant visa changes have had less direct impact on this cohort.  

• Housing Impact: Chinese students generally prefer PBSA (around 78%) and often have higher budgets, with over half (56.8%) preferring accommodation in the £250-£350+ per week range. Key cities include London (UCL, Imperial, LSE, King's, UAL), Manchester, Edinburgh, and Warwick, with significant populations also in Southampton, Sheffield, York, and Birmingham.  

3. Nigeria: Rapid Growth Meets Policy Headwinds

Nigeria ranked third with 57,505 students in 2023/24, after years of remarkable growth. However, 2023/24 saw a dramatic 36% decline in new entrants, and 2024 visa issuances plummeted by 55%. This is directly linked to the dependant visa policy changes and economic challenges within Nigeria.  

• Housing Impact: There's a shift towards lower rental brackets, with a high proportion (86%) targeting the £150-£250 per week range.  

4. Pakistan: Consistent Upward Trajectory

Pakistan demonstrates sustained growth, ranking fourth with 45,720 students in 2023/24. New entrants grew by an impressive 30.6% in 2023/24, and 2024 visa issuances increased by 13%.  

• Housing Impact: Shared accommodation is popular (£100-£250 per week for university halls, £300-£600 per month for shared private rentals). Some data suggests a tendency for shorter bookings (<30 weeks). Students are spread across cities like London, Birmingham, Manchester, Leeds, Bradford, and Coventry.  

5. United States: Stable and Resilient Demand

The USA provides a stable cohort, fifth largest with 23,250 students in 2023/24. Modest growth continues, with a 6% increase in new entrants (2023/24) and a 5% rise in 2024 visa issuances.  

• Housing Impact: UK student accommodation (average USD 700-1200/month) is generally more affordable than in the US (USD 800-1500/month for shared flats). A tendency for shorter stays (<30 weeks) is noted. Strong preference for universities in Scotland (St. Andrews, Edinburgh, Glasgow) and London (UCL, LSE, King's), plus Oxford and Cambridge.  

Collective Impact on the UK Housing Market

International students are a critical demand segment, with a strong preference for PBSA – 40% lived in private PBSA in 2021/22, and they are 60% more likely to choose PBSA than domestic peers. These fuels demand in both the PBSA and Private Rented Sector (PRS).  

• PBSA Demand & Supply Gap: A structural undersupply of PBSA persists, with a potential shortfall of 620,000 beds estimated for 2025. Cities like London, Manchester, Bristol, Glasgow, and Edinburgh face significant gaps.  
• Rental Growth: This imbalance drives strong rental growth. Bonard reported an 11.3% average UK PBSA rental increase in 2024 , while Cushman & Wakefield noted 8.02% for 2023/24 (9.39% for private PBSA).  
• Pressure on PRS: Students also compete in the PRS, adding pressure to HMO and flat rental prices, especially as the availability of larger HMOs declines due to regulatory and tax changes.  

What This Means for Property Businesses

The shifting international student landscape offers both opportunities and challenges for the UK property sector.

1. For Developers & PBSA Operators:

• Opportunity: The persistent undersupply in key cities creates ongoing development opportunities. Understanding varied student budgets (e.g., price-sensitive Indian students vs. higher-budget Chinese students) allows for product diversification – mixing premium studios with affordable cluster flats.  

• Challenge: High construction/financing costs and complex regulations like the Building Safety Act are significant hurdles. Balancing viable rents with student affordability is crucial.  
  

2. For Investors:

• Opportunity: UK PBSA remains a resilient asset class with strong returns. Acquiring existing operational assets is attractive given new development challenges.  

• Challenge: Increased selectivity is needed, focusing on micro-location dynamics, university strength, and diverse student sources. Policy uncertainty around student visas remains a risk.  

A Look Forward

The UK's appeal to international students endures, but the landscape is undeniably in flux. Visa policies, global economics, and competition from other study destinations will continue to shape student flows. For businesses in the UK student housing market, staying attuned to these trends, particularly from the top source countries, is paramount. Agility, data-driven decisions, and a focus on delivering value across different student segments will be the hallmarks of success in this evolving market. The demand for well-managed, appropriately priced student accommodation, especially in undersupplied cities, is set to remain a compelling proposition.