A new two-year post-university work visa allowing more graduates to stay in the UK for longer could fuel a boom in the private rental sector (PRS).
The new Graduate Route announced by the government earlier this month will be accessible to all international graduates, including those from China. They must have valid UK immigration status and have successfully completed a course of study at undergraduate level or above at an approved UK Higher Education Provider.
The visa allowing eligible graduates to work or seek work at any skill level and in any subject will give them valuable work experience at the outset of their careers. It will also supplement government action to recruit and retain the most talented who will use their expertise to carry out ground-breaking work in science, technology and research.
The new route, significantly longer than the current time limit which gives most graduates from overseas only four months in which to secure long-term work, will benefit the student intake of 2020-21. The change is expected to increase the number of students applying to study in the UK, thereby providing a boost for higher education institutions and employers.
High-quality rental options
The new visa is also expected to create a boost for the PRS and the purpose-built student accommodation (PBSA) sector following an increase in student numbers, with more choosing higher-quality accommodation during their univesity years and graduates forming a substantial proportion of the UK’s ‘Generation Rent’.
Although London attracts the highest number of overseas higher education students, the capital is followed closely by Manchester, where 13,750 international students lived in the academic year 2017-18, according to figures released by the UK Council for International Student Affairs (UKCISA).
Other major university cities in the top 20 list of foreign student numbers include Cardiff, Coventry, Birmingham, Liverpool, Leeds, Sheffield and Edinburgh.
According to Gary Hall, Knight Franks’s Head of Lettings, both sales and lettings are expected to be given an uplift, especially in London and the other leading university cities. He stated that foreign students already have a significant presence in the London lettings market and make a really substantial contribution to the wider economy.
Hall added that the visa change would only increase and strengthen the current trend. BTL landlords in areas of large student populations could fully expect to see an increase in demand for rental property from foreign graduates once the change comes into effect.
For landlords whose target market is young professional city-dwellers, which often includes new graduates, being able to offer suitable accommodation such as one and two bedroom properties as well as houses in multiple occupation (HMOs) in prime locations, could prove to be a smart business move in years to come.
Attracting the brightest and best
The extension of the visa is expected to stimulate the economy by enabling employers to choose potential employees from a larger pool of top candidates.
Gavin Williamson, Education Secretary, has commented that overseas students make an important contribution both culturally and economically to the universities and, more broadly, to the UK. These students are an asset to Great Britain, which is why the government has increased the length of time they can stay in the UK after they have completed their studies.
Williamson added that the UK’s universities flourish by being open international institutions and that the introduction of the new graduate route will ensure the renowned higher education sector continues to attract the most talented internationally to Britain.