onefourzero analysis shows outlook for education investment remains strong despite Brexit

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Since the UK voted to leave the EU, there has been much speculation over the risks the UK’s educational institutions may face as a result of falling numbers of international students, and damage to Britain’s international reputation.

It’s perhaps no surprise then that investors have given education assets a wide berth in 2017, with Preqin data showing only 8 deals taking place, compared to 16 in the same period last year.

However, despite Brexit, the market has remained steady, with overseas students just as keen to come to the UK, and UK policy is largely welcoming to international students.

onefourzero’s own research shows a 7% increase in total search volumes over the past 12 months, driven by double-digit growth from China, India and Korea, suggesting demand remains high despite the political climate.

Political Context – not as risky as it seems?

Theresa May made headlines earlier this year through reaffirming her commitment to cutting net migration to the UK to under 100,000 – which currently includes foreign students. However, the decision to include students in the UK’s net migration figures has come up against significant opposition from the Prime Minister’s own cabinet, as well as MPs across parties, higher education trade associations, think tanks, and no less than 8 Select Committees.

Recent research by Universities UK puts the value of international students to the UK at £25 billion. The UK economy is also highly dependent on international students to reach the Government’s current £30bn education export target by 2020.

Understandably, the Government have openly acknowledged the importance of international students’ economic value for the UK, with Universities Minister Jo Johnson stating that the ‘immediate economic benefits from international students…are felt right across the UK.’

Given the value of overseas students to the UK education market, the policy of including them in net immigration figures is likely to last only as long as the prime minister herself. UK policy looks set to encourage overseas students, rather than posing a risk to investors.

Last year, the government also relaxed some of the rules surrounding the Tier 4 Student Visa, allowing students to apply for a visa renewal from the UK, for example, which should further encourage foreign students.

Fears that the UK would lose its international reputation as a centre of academic excellence as a result of Brexit have, so far, gone unproven – as international students continue to show an interest in the UK.

Public data shows shift in international students from EU to non-EU countries

Figures published by the university admissions service Ucas show that EU applicants dropped by 4.4% to 51,185 in 2017, around 2,375 fewer applicants than in 2016, reversing a trend of year-on-year rises since 2012. But foreign student numbers overall remain steady. The same Ucas figures show the number of foreign students applying to British universities in 2017 was the highest ever at 70,945 – a 2% rise on last year.

Our digital analysis supports this trend

onefourzero’s own research shows that the Brexit vote has had no direct effect on the number of international students searching for UK universities.

Search volume increased by 7% in August 2016 – February 2017 compared with the same period the previous year, and while search terms for ‘visa’ and ‘cost’ increased, negative sentiment did not. Instead, the decline in interest from students in countries such as Russia (-14%) and Nigeria (-4%) follow a long-term trend.

The effect of Trump, however, has meant less interest in studying in the USA from students in Mexico and the Middle East, due to the president’s vocal anti-immigration sentiment. 37% of posts from the Middle East show negative sentiment towards ‘safety’ since January 2017. This could prove to be an opportunity for the UK, as these students look elsewhere.

Our figures show the largest search volume increase came from China, where demand for Western-style education remains high.

Chinese investors have recently bought American educational assets Learning Care Group and Wall Street English, as well as the Australian organisation Study Group, as a result of demand from a growing middle-class of students for wider study opportunities.

This continued demand among Chinese students backs up our own local conversation analysis, which indicates that that quality of education, rather than political context, remains the foremost consideration amongst these students. Students from China, as well as those from India, South Korea, Mexico, Brazil and Nigeria all considered educational quality most important when choosing where to study.

Prospects for 2018

So long as the UK maintains its reputation as a world-class destination to study, and continues to welcome overseas students, the education market looks set to be resilient to any risks posed by Brexit.

Through the use of digital research, savvy educational businesses are analysing these trends in demand and shaping their student recruitment strategies accordingly – looking at how they can target growing markets in Asia and supporting the applicants’ visa process to make the process easier. These strategies are allowing them to connect with their audiences and deliver a better ROI to their marketing spend.

Businesses that do so effectively should expect to see continuing strong demand in 2018.

To find out how onefourzero‘s digital due diligence can help you analyse the trends in the global education market, please contact