UK Living Roundup June 2026

Much has been said about the recent decline in international students in the UK from recent historical highs. But what do universities themselves expect will happen over the coming years? Luckily, the annual Office for Students financial sustainability report gives us a good idea – alongside the requisite warnings and caveats.

In this roundup:
 

• Universities predict a return to international student growth
• Fees to outpace recruitment
• Winners and losers

After a year of moderate decline, England’s universities are expecting to record a small 1% increase in total overseas student numbers in 2025/26. From there, growth is expected to rise to 4% per year for the remaining forecast period up to 2028/29.

This would see the number of international students rise from 517,000 to 593,000 over four years and return to its previous peak by 2027/28.

The concern with these forecasts is what the OfS calls ‘overoptimism’. The report points out that while universities are predicting a 4.2% growth in the number of domestic full-time undergraduate entrants in 2026/27, UCAS applications have risen by just 2.6%. The words ‘volatile’ and ‘volatility’ appear 15 times in the report, with the OfS expecting ‘continued volatility’ in student recruitment due to policy changes and geopolitical conditions.

Indeed, universities’ forecasts have overestimated actual growth in recent years, as the chart below shows. At their most buoyant, they expected international student numbers to hit 613,000 in 2024/25 – nearly 100,000 over the eventual outturn. But they have been tempering those expectations in recent years, and the latest forecasts are the most modest since before the surge in student numbers four years ago.

It’s also true that universities undershot in their expectations for growth just a few years ago, the high expectations in subsequent years potentially an overcorrection for initially underestimating the number of students coming in.

Regardless of how close these forecasts are to reality, what is undoubtedly true is that universities are pinning their hopes on continued growth in tuition fees, essentially relying more on hiking prices than on recruitment.

Despite a 7% annual decline in student numbers in the most recent report, tuition fee income from non-UK students was flat (+0.6% YoY). Looking forward, in aggregate England’s universities are forecasting a 33% rise in international tuition fee income by 2028/29 against 15% growth in international student numbers. Meaning the average annual income from an overseas student would rise from £16,400 in 2019/20 to £24,600 in 2028/29.

Here the OfS once again raises an eyebrow and offers a word of warning. Providers are expecting income across the sector to rise by £8.4bn between 2024/25 and 2028/29, with more than 40% of this increase coming from international tuition fees. That’s a lot of heavy lifting for an income source that was essentially flat last year. Again, the word ‘optimistic’ comes up.

Another theme in the report, and one that has been particularly relevant for PBSA, is the fact that headline numbers mask a wide variety of performance. This is a theme we’ve been hearing more and more since rental growth in the sector started cooling after its post-pandemic surge: demand isn’t distributed equally. Some markets are performing well, while others are very much not. The key is finding those locations – and those micro-locations – that work and understanding why.

Take, for example, the change in international students on a regional level. Every English region saw a decline last year: at one end of the spectrum was the East Midlands at -21% and at the other was the North West with just a 1% fall. And, looking ahead, universities in six of the nine regions expect a decline this year (one notable exception being the universities in the West Midlands hoping for a whopping 9% rise).

The OfS also splits universities into categories, which should help us work out whether sector-wide declines are, indeed, sector-wide or whether certain segments are having a disproportionate impact. On an annual basis, medium and specialist providers showed the biggest decline (-11% and -17% respectively), whereas those offering mostly Level 4 and 5 qualifications (i.e. qualifications above A levels but below undergraduate degrees) showed continued growth (+39%, but off a small base).

Larger research-intensive universities expect the highest rise in international fee income, accounting for more than half of the sector’s £3.6bn of forecast growth, while specialist universities are forecasting the greatest relative rise.

However, even these increasingly specific categories – groups of between 14 and 58 providers – fail to capture the breadth of divergence. As the report notes, medium and smaller providers collectively reported a year-on-year improvement in surplus/deficit levels, but nearly half of them saw a decline. Similarly, the aggregate surplus among larger research-intensive and Level 4 and 5 providers fell, but nearly half of them showed an improvement.

Any aggregation, therefore, risks losing city or provider-level nuance. When it comes to understanding which locations work and why, a university-specific approach is necessary.