How badly would cuts to international student visas hurt UK city economies?

Coventry is one of the cities that would be hit hardest by student visa cuts. Image: cmglee/Wikimedia Commons.

News that the government is looking to halve international student visas will no doubt be a concern for the higher education sector, and to those worried about the UK’s poor export performance. But it’s also likely to have big implications for a number of cities across the country.

Any restriction on visas, if applied tomorrow, would apply only to those students outside of the EU. However, this may change when the UK exits the EU, and so in the following analysis we look at all international students to look at the wider effect it might have.

In 2014-15, there were around 440,000 students from abroad studying in the UK – one-fifth of all students at UK higher education institutions (not including the Open University). Chinese students made up by far the largest share of these students, accounting for 20 per cent of all international students. To put this into perspective, Indian students made up the second biggest group of foreign students, accounted for 4 per cent in total.

Of course, these students were not evenly distributed across the UK, with London unsurprisingly the most popular destination, attracting a quarter of international students. However, as a share, Coventry had the largest number of foreign students – the table below shows that almost a third of those studying in the city were from outside of the UK. As was the case in most cities, China was the most common country of origin, with a quarter of all foreign students in Coventry being Chinese. Ipswich, on the other hand, had the lowest share, with just 2 per cent of students from abroad.

Source: HESA Admissions. Note: Cities with campuses of fewer than 500 students were excluded from the analysis.

Cuts to student visas could have big implications for cities such as Coventry, Exeter and Sunderland. Universities UK estimated that foreign students were worth a total of £10.7bn to the UK economy in 2011-12, through fees and money spent by the students in their time here.

Taking this figure and applying it to the location of foreign students would mean that they were worth £380m to the Coventry economy, £123m the Exeter economy and £83m to the Sunderland one. In Coventry this was equivalent to over 6 per cent of its total output in 2011-12.

The current political climate means that talking about visa restrictions is popular with the electorate. But such decisions will have an economic impact too, and may well hurt the very places the government is attempting to help through its place-based industrial strategy. And this, surely, would be counterproductive.

You can see more analysis on migration and student and new graduate mobility in the Centre for Cities’ Great British Brain Drain report.


Paul Swinney is senior economist at the Centre for Cities. This article was originally published on the think tank’s blog.

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Space for 8,000 new homes, most of them affordable... Why it's time to demolish Buckingham Palace

Get a lovely new housing estate, there. Image: Getty.

Scene: a council meeting.

Councillor 1: They say it’s going to cost £369m to repair and bring up to modern standards.

Councillor 2: £369m? Lambeth balked at paying just £14m to repair Cressingham Gardens. They said they’d rather knock it down and start again.

Councillor 1: Then we’re agreed? We knock Buckingham Palace down and build new housing there instead.

Obviously this would never happen. For a start, Buckingham Palace is Grade I listed, but… just imagine. Imagine if refurbishment costs were deemed disproportionate and, like many council estates before it, the palace was marked for “regeneration”.

State events transfer to Kensington Palace, St James’s and Windsor. The Crown Estate is persuaded, as good PR, to sell the land at a nominal fee to City Hall or a housing association. What could we build on roughly 21 hectares of land, within walking distance of transport and green space?

The area’s a conservation zone (Westminster Council’s Royal Parks conservation area, to be exact), so modernist towers are out. Pete Redman, a housing policy and research consultant at TradeRisks, calculates that the site could provide “parks, plazas, offices, cafes and 8,000 new dwellings without overlooking the top floor restaurant of the London Hilton Park Lane”.

Now, the Hilton is 100m tall, and we doubt Westminster’s planning committee would go anywhere near that. To get 8,000 homes, you need a density of 380 u/ha (units per hectare), which is pretty high, but still within the range permitted by City Hall, whose density matrix allows up to 405 u/ha (though they’d be one or two bedroom flats at this density) in an area with good public transport links. We can all agree that Buckingham Palace is excellently connected.

So what could the development look like? Lewisham Gateway is achieving a density of 350u/ha with blocks between eight and 25 storeys. On the other hand, Notting Hill Housing’s Micawber Street development manages the same density with mansion blocks and mews houses, no more than seven storeys high. It’s also a relatively small site, and so doesn’t take into account the impact of streets and public space.

Bermondsey Spa might be a better comparison. That achieves a density of 333u/ha over an area slightly larger than Lewisham Gateway (but still one-tenth of the Buckingham Palace site), with no buildings higher than 10 storeys.

The Buck House project seems perfect for the Create Streets model, which advocates terraced streets over multi-storey buildings. Director Nicholas Boys Smith, while not enthusiastic about bulldozing the palace, cites areas of London with existing high densities that we think of as being idyllic neighbourhoods: Pimlico (about 175u/ha) or Ladbroke Grove (about 230u/ha).


“You can get to very high densities with narrow streets and medium rise buildings,” he says. “Pimlico is four to six storeys, though of course the number of units depends on the size of the homes. The point is to develop a masterplan that sets the parameters of what’s acceptable first – how wide the streets are, types of open space, pedestrian only areas – before you get to the homes.”

Boys Smith goes on to talk about the importance of working collaboratively with the community before embarking on a design. In this scenario, there is no existing community – but it should be possible to identify potential future residents. Remember, in our fantasy the Crown Estate has been guilt-tripped into handing over the land for a song, which means it’s feasible for a housing association to develop the area and keep properties genuinely affordable.

Westminster Council estimates it needs an additional 5,600 social rented homes a year to meet demand. It has a waiting list of 5,500 households in immediate need, and knows of another 20,000 which can’t afford market rents. Even if we accepted a density level similar to Ladbroke Grove, that’s 4,830 homes where Buckingham Palace currently stands. A Bermondsey Spa-style density would generate nearly 7,000 homes.

There’s precedent for affordability, too. To take one example, the Peabody Trust is able to build genuinely affordable homes in part because local authorities give it land. In a Peabody development in Kensington and Chelsea, only 25 per cent of homes were sold on the open market. Similarly, 30 per cent of all L&Q’s new starts in 2016 were for commercial sale.

In other words, this development wouldn’t need to be all luxury flats with a few token affordable homes thrown in.

A kindly soul within City Hall did some rough and ready sums based on the figure of 8,000 homes, and reckoned that perhaps 1,500 would have to be sold to cover demolition and construction costs, which would leave around 80 per cent affordable. And putting the development in the hands of a housing association, financed through sales – at, let’s remember, Mayfair prices – should keep rents based on salaries rather than market rates.

Now, if we can just persuade Historic England to ditch that pesky Grade I listing. After all, the Queen actually prefers Windsor Castle…

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