UK Higher Education: Policy Changes & Evolving Student Trends

The UK has long been a global leader in higher education, attracting international students to its prestigious universities, cultural diversity, and job prospects. International students contribute over £40 billion annually to the economy through tuition fees and other expenditures, playing a crucial role in sustaining the UK higher education sector. This demand has also fueled a booming student housing market valued at £7.35 billion in 2025, as per Mordor Intelligence.

However, this thriving ecosystem is now at a critical juncture. Recent UK higher education policy changes, visa regulations, and tuition fee structures, amidst global economic pressures, are reshaping student mobility patterns and the financial sustainability of UK universities.

The UK student housing sector is facing increased competition, leading to shifts in market trends. While PBSA (Purpose-Built Student Accommodation) remained resilient in 2024-25, occupancy dropped slightly, with operators relying more on incentives and discounts to fill beds. Early indications suggest another slow year in 2025-26, with students holding off bookings, leading to higher acquisition costs for providers.

As the UK higher education landscape evolves, students, universities, and investors must navigate new challenges in the industry, especially with recent visa policy changes and evolving student housing trends. This article explores the impact of these changes on student housing and International student enrolment trends, shedding light on what lies ahead for the UK academic landscape.

Shifts in UK Higher Education Post Visa Policy Changes

Recent UK policy shifts are reshaping international student dynamics in 2025. These changes not only affect university enrolments but also have direct consequences for student housing demand. Amber’s latest UK Student Housing Annual Report (2024-25) explores their impact on the sector. A few of these shifts have been covered below, however, readers can download the full report for an in-depth analysis of these factors!

#1 Dependent Visa Policy Change

One of the most significant policy changes affecting UK higher education came into effect in January 2024, restricting international undergraduate (UG) and postgraduate (PG) students from bringing dependents, with an exception for PhD candidates. This move has already had a dramatic impact on student applications. According to the UK Government, between July 2023 and July 2024, total UK student visa applications dropped by 16%, with postgraduate applications experiencing a staggering 55% decline and undergraduate applications falling by 23%.

• The financial implications of this decline are substantial. International students contribute significantly to university revenue, and if this downward trend continues, UK institutions could lose nearly £1 billion in tuition fees and related expenditures, as observed by the UK Government.
• The UK student visa policy change has particularly impacted universities that traditionally relied on international enrolments —particularly from countries where students often bring dependents, such as India, Nigeria, and Pakistan—are expected to be the hardest hit.
• As a result, PBSA providers have faced lower leasing velocity, prompting many to offer discounts and incentives to attract tenants from major source countries. This increased competition is expected to persist into the 2025-26 cycle, with some students delaying bookings in hopes of better deals.
• Property operators will need to be more vigilant about pricing strategies to sustain high occupancy levels during seasonal peaks.

#2 Increased Financial Requirements for International Students

From January 2025, the minimum financial requirement for international students increased substantially. Those studying in London will need to present a monthly living budget of £1,483 (up from £1,334), while students outside London must provide financial funds of £1,136 per month (previously £1,023). These changes apply for up to nine months, making the UK one of the most expensive study destinations globally.

• Students from lower-income backgrounds may be priced out of UK higher education owing to these policy changes, leading to reduced applications from key international markets such as South Asia and Africa. As a result, other study destinations, particularly those with more affordable financial requirements, may see an uptick in international enrolments.
• This additional financial burden is expected to push more students toward shared housing, including HMOs (Houses in Multiple Occupation, while the demand for PBSAs is likely to remain stable.

#3 Domestic Tuition Fee Increase

Since 2017, domestic tuition fees in the UK have been capped at £9,250, despite rising inflation and reduced government funding post-Brexit. Starting in January 2025, fees will increase to £9,535—a modest rise of 3% after nearly a decade of stagnation.

• While this increase provides some relief for universities facing mounting budget deficits, it is unlikely to offset their financial struggles. Over 30% of UK university revenue comes from international students, highlighting the sector’s reliance on International student enrolments.
• However, the policy changes have contributed to declining international applications, forcing institutions to seek alternative funding sources, such as corporate partnerships and research grants. Additionally, they may consider cost-cutting measures, including staff reductions or program closures.

#4 Skilled Worker Visa

The UK government also introduced stricter salary thresholds for the Skilled Worker visa, a key pathway for international graduates seeking employment post-study.

• In April 2024, the minimum salary required to qualify for this visa was set at £38,700, with a lower threshold of £30,960 for new graduates and PhD holders. This student visa policy change has significantly impacted international students' employment prospects.
• However, data reveal that most UK graduates earn between £24,000 and £26,999 within 15 months of graduation, falling significantly short of the new visa requirements. This raises concerns about employer sponsorship and job availability, as fewer companies are willing or financially able to sponsor international graduates under the new rules.
• As a result, prospective students may reconsider the UK as a study destination due to the policy change. Instead, they may choose alternatives such as Canada or Australia, where post-study work opportunities are more accessible.

#5 Immigration Health Surcharge Increase

Another major financial challenge for international students is the sharp rise in the Immigration Health Surcharge (IHS) as part of the recent student visa policy change. Previously set at £470 per year, the surcharge increased to £776 in February 2024, significantly increasing the upfront costs of studying in the UK.

• For a typical three-year undergraduate degree, an international student will now pay £2,328 in health surcharges alone—a 65% increase from previous rates. This additional expense, combined with higher visa costs, increased living expenses, and rising tuition fees, may make the UK a less financially viable option for students.
• Additionally, this cost increase may lead to lower demand for PBSA in traditionally high-cost markets, shifting demand toward more affordable locations.

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Decoding Financial Challenges of UK Universities

UK universities are facing an unprecedented financial strain, driven by a combination of unchanged domestic tuition fees, reduced post-Brexit funding, inflation, and shifting immigration policies. These pressures have forced institutions to implement cost-cutting measures. At the same time, international student enrolments in the UK—one of their primary revenue sources—are declining due to restrictive visa policies and rising costs. The impact of this is twofold:

#1 Revenue Pressures and Budget Deficits

For over a decade, domestic tuition fees were capped at £9,250, failing to keep pace with inflation and rising operational costs. While fees will increase to £9,535 in 2025, this marginal adjustment doesn’t alleviate financial strain completely. At the same time, post-Brexit funding cuts have reduced universities’ access to EU grants and research collaborations, further widening budget gaps. With nearly 40% of institutions facing deficits according to “Amber’s UK Student Housing Annual Report 2024- 25”, some universities now risk financial insolvency or closure. However, by adopting new measures to improve the inflow of revenue, UK universities are expected to bounce back with increased flexibility and strategic future planning despite the challenges posed by the student visa policy change.

#2 Shifts in International Student Enrolment

International students contribute over £40 billion annually, making them critical to university finances. However, recent UK Higher Education policy changes—such as the ban on dependents for most students, increased financial requirements, and higher Immigration Health Surcharge (IHS) fees—have led to a 16% drop in student visa applications. Postgraduate applications have fallen by 55%, while undergraduate numbers are down 23%, potentially leading to a £1 billion revenue loss for universities. On the other hand, other emerging markets like Nepal, Turkey, etc. are growing rapidly.

Shifting Trends in International Student Applications in 2025

The UK’s higher education sector is witnessing a significant decline in international student applications, driven by stricter visa regulations owing to policy changes, rising financial barriers, and increased competition from other global study destinations. While the UK remains a key higher education destination, changing student priorities and alternative study options are reshaping international student enrolment patterns, forcing universities to rethink their strategies.

#1 Declines from Key International Markets

The stricter UK Higher Education policy changes from 2023 to 2024 have had a disproportionate impact on key international student markets, impacting major drops in main applicant visa application numbers. For a full analysis of main applicant and dependent visa numbers, download the latest "Amber's UK Student Housing Annual Report (2024-25)":

• India: A 31.14% drop in main applicant visas (from 139,182 in YE September 2023 to 95,846 in YE September 2024) highlights the severe impact of the UK’s visa restrictions on this source market.
• China: The UK’s largest international student market, China, saw a 4.46% decrease in main applicant visas (from 105,756 in YE September 2023 to 101,035 in YE September 2024), signalling a shift in student mobility patterns.
• Nigeria: With a 62.27% fall in main applicant visas (from 52,358 in YE September 2023 to 19,754 in YE September 2024), Nigerian students are increasingly seeking alternative destinations with more favourable immigration policies.
• Other markets, such as Bangladesh and Malaysia, also saw significant reductions in applications.

#2 Growth in Applications from Emerging Markets

Despite the overall decline and major UK Higher Education policy changes, a few countries have shown notable growth in main applicant applications from 2023 to 2024:

• Nepal: Experienced a 45.89% increase in main applicant applications (from 7,934 in YE September 2023 to 11,575 in YE September 2024), indicating a rising interest in UK education despite financial challenges.
• Pakistan: Experienced a 7.71% increase in main applicants (from 34,388 in YE September 2023 to 37,039 in YE September 2024), reflecting a steady yet growing demand for UK education.
• Turkey: Witnessed a 7.78% rise in main applicant applications (from 4,229 in YE September 2023 to 4,558 in YE September 2024), potentially driven by regional geopolitical factors and a shift in educational aspirations.

#3 Improvement in QS Rankings Boost Demand for UK Universities

The recent policy changes come at a time when the 2024-2025 QS University Rankings show significant improvements for several UK universities, enhancing their appeal to domestic and international students and strengthening the UK's reputation as a leading destination for higher education.

Several universities in the UK have observed an improvement in their rankings, which are listed below. To unlock the complete QS University Rankings analysis, download Amber’s UK Student Housing Annual Report (2024-25) to get an in-depth understanding of QS Rankings in the UK and globally.

1. Imperial College London: Jumping from 6th to 2nd, Imperial’s significant rise solidifies its position as a global leader, especially in engineering and technology.
2. Queen Mary University of London: An impressive leap from 145th to 120th increases Queen Mary’s visibility, especially among international students seeking diverse programs.
3. University of Liverpool: A move from 176th to 165th reflects Liverpool’s increasing academic reputation, making it a more attractive option for students.

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The Road Ahead for UK Higher Education

While the UK remains a top student destination for higher education, a decline in international student applications from key markets like India, China, and Nigeria raises concerns about the country’s global standing. The UK student visa policy change, along with destinations like the US, Canada, and Australia offering more flexible visa policies and stronger post-graduate work opportunities, might risk narrowing the UK’s appeal.

The Renters’ Rights Bill also looms over the sector, with uncertainty of its impact on student housing, particularly HMOs. Some landlords may increase rents or consolidate supply in response to potential tenancy length changes, further shaping the rental landscape.

To stay competitive, immigration policies and financial structures must adapt, prioritizing affordability to align with shifting student preferences. Universities must refine their value proposition, explore sustainable funding models, and advocate for policies that support international students.

In the UK, active collaboration between policymakers, institutions, and investors, will be essential in shaping a more resilient and globally competitive higher education landscape in the upcoming years.

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