UK plans to reduce number of international students could impact central London rental market, says LCP
Government plans to further reduce the number of international students coming to study in the UK could have an adverse effect on the central London property rental market, according to a report by London Central Portfolio (LCP).
Last week’s release of the Census data has revealed the extent of the immigrant population in London. People classifying themselves as “White Britons” are now a minority in the capital, making up just 45 per cent of the population. According to LCP, whilst the government needs to address the issue of immigration, it must avoid implementing blanket policies which catch genuine contributors to the economy and society in general.
LCP believes that in an attempt to reduce numbers, the government has already set themselves an “easy hit” by seeking to drastically reduce the number of global students coming to the UK, with inevitable knock-on effects for economic growth. Estimates of the financial loss to higher education runs between GBP4bn and GBP8bn, according to the Universities UK, and this does not take into account everything else that international students bring to the Prime London Central (PLC) economy.
Whilst bankers still make up the largest proportion of London Central Portfolio’s (LCP’s) tenant profile at 37 per cent, the number of new tenancy starts by finance professionals is plateauing. Their share of the sector has only increased three per cent since 2006. Students have now become a significant driver in the PLC rental market.
Research just conducted by LCP indicates that wealthy foreign students now account for 29 per cent of the PLC private rented sector. They represent the second biggest proportion of the market having more than doubled their share in the last six years. At LCP’s pre-Credit Crunch audit in 2006, they represented just 12 per cent of the market.
Naomi Heaton, chief executive of LCP, says: “Foreigners are attracted to Prime London Central as a financial centre, a ‘go to’ destination and as a premier league provider of education. Alongside the aspiration for a great British education, there has been a significant appetite to invest in ‘bricks and mortar’. Recent changes to the immigration rules could send these students, and with them significant international wealth and investment, elsewhere. Hopefully David Cameron’s new stance on Chinese visas will trigger a more commercial approach to the rules on immigration so that international students will continue to make London their first choice to the benefit of the UK economy.”