Chinese Student Policy Shift and Its Implications for UK Student Housing

As planners, we are well aware that shifts in global policy can ripple through local markets in unexpected ways. China’s recent decision to restrict funding for overseas students to those admitted into the world’s top 100 universities is one such shift. While the immediate impact is on universities themselves, the consequences are now playing out in the UK’s purpose-built student accommodation (PBSA) sector, particularly in cities that had come to rely heavily on Chinese tenants.

A Market Once Built on Certainty

For the past decade, the role of Chinese students in shaping demand for PBSA has been impossible to ignore. Their preference for modern, well-managed blocks, as opposed to traditional shared housing, helped justify billions of pounds of private investment. Developers were confident that this cohort would fill newly delivered towers, often at premium rents, and for many years they were correct.

In cities such as Coventry, Newcastle, Liverpool, and Leicester, Chinese enrolments underpinned large-scale PBSA pipelines. For planners, this was both an opportunity and a challenge: ensuring enough student housing to meet need, while balancing competing land uses and concerns over saturation.

A Sharper Geography of Demand

That certainty is now fading. By channelling state support only to top-ranked global universities, China has effectively redrawn the map of where demand will be strongest. Students from China are still arriving, but they are concentrating in London, Manchester, and Edinburgh, where globally recognised institutions continue to attract them.

Elsewhere, the picture is less comfortable. Universities outside the top 100 have seen significant reductions in Chinese enrolments, and the PBSA schemes around them are feeling the strain. Portsmouth, for example, experienced a sharp drop in postgraduate numbers last year, while Coventry, long buoyed by Chinese students, is now more reliant on Warwick’s elite standing than on its own university pipeline.

From a planning perspective, this introduces a more uneven geography of demand. Where once most university towns could assume a steady inflow of international students, the reality now is that PBSA viability will hinge far more on institutional rankings and student mix.

Evidence of Strain in the Market

The data already indicate a slowdown. Nationally, only around a third of PBSA beds had been leased for the 2024–25 academic year by March, compared with nearly half at the same point a year earlier. This is the weakest leasing pace in several years, and it coincides with a flattening in Chinese postgraduate arrivals.

In markets that once depended heavily on this demand, some schemes are struggling to let. Discounts, incentives, and a pivot towards domestic students are becoming more common. By contrast, London and Manchester continue to absorb stock at premium rents, with the pull of their global institutions remaining strong.

What This Means for Planning and Investment

For planners, the implications are twofold. First, we must recognise that demand for PBSA is no longer evenly spread. Proposals for new student blocks in cities outside the global elite need closer scrutiny, not only in terms of housing numbers but also in terms of the long-term sustainability of the student market. Over-reliance on a single overseas demographic has proven risky.

Second, there is a broader urban development question. In some secondary cities, the scale of PBSA development over the past decade was justified by international demand that may not return. If towers are not fully occupied by students, alternative uses, such as housing for young professionals or key workers, may need to be considered. The flexibility of the stock, both physically and in terms of planning conditions, will be important.

Looking Ahead

The UK still faces a structural shortage of student accommodation overall, particularly in high-demand centres. But as Chinese enrolments plateau or decline in some locations, a more nuanced understanding of demand is required. As town planners, we should be cautious about encouraging further PBSA schemes in markets already facing oversupply, while being proactive in supporting adaptive reuse where demand falls short.

China’s policy change is a reminder that global education flows are not constants; they are subject to political, economic and cultural pressures far beyond our control. For the PBSA sector, and for the towns and cities that host it, resilience will come from diversification of student cohorts, of housing models, and of town planning responses.

Writer: David Maddox, Founder