UK Cities DNA | Stemming the flow: The role of housing in reversing regional brain drain
4 minutes to read
- London has historically been a net exporter of students, whilst large regional cities such as Manchester, Leeds and Birmingham are net importers. This trend typically reverses upon graduation.
- Graduates want affordable homes in great locations, close to work and entertainment. Student accommodation has improved and professionalised over the last decade. Graduates want more of the same post-study.
- Of the final year students who said they would be moving into a rented property post-graduation, 60% indicated that they would consider living in a purpose-built development.
- There are 59,000 BTR homes under construction, and a further 102,000 with full planning permission granted. Around two thirds of BTR homes in the pipeline are located outside of London, led by Birmingham, Manchester, Leeds and Edinburgh.
Graduate retention is an important but often complex issue.
Economic, social, geographical and employment factors all contribute to whether graduates decide to stay in and their university town post-study. Retention rates differ throughout the UK, yet there is a unanimous acknowledgement of the economic benefits that retaining talent provides. In the future, retaining talent will take on even greater importance, in the context of the shifts underway across UK towns and cities. Consequently, implementing strategies that foster an appealing environment for skilled students is a priority for local authorities.
London is historically a net exporter of students, whilst cities such as Manchester, Leeds and Birmingham are net importers. This trend typically reverses upon graduation.
It is often reported that UK regional towns and cities experience a “brain drain” of graduates to London. London experiences a large inflow of people aged 22-30, and an outflow of people aged 31 and older. Other large cities such as Manchester and Birmingham experience a significant inflow of people aged 18-21, but then see outflows of people aged 22 and above.
Knight Frank research, conducted in partnership with UCAS, finds 64% of final-year students in London intend to remain in the city after graduation. This figure is higher than the UK average of 38%, and above Glasgow (53%), Bristol (48%) and Manchester (44%).
Read the full report to find out more.
Many initiatives are already in place to help drive graduate retention, however, these are predominantly employment-focused.
While access to good jobs is undoubtedly a key driver for graduates, other factors are at play too. Graduates want affordable homes in great locations. Knight Frank’s survey with UCAS indicates more than half (51%) of final year students plan to move into a property in the private rented sector following graduation. For London graduates that means over 70,000 students. The numbers in the regional UK cities are lower but still significant – approximately 16,050 in Birmingham, 14,500 in Leeds, 12,800 in Bristol, 16,100 in Manchester, and 14,000 in Edinburgh.
Affordability is a significant challenge for graduates, who often find themselves needing 'house share' arrangements, driven by the high cost of living and renting in many urban areas. Reliance on shared living situations can exacerbate the demand for housing.
For most, the journey into purpose-designed rental accommodation ends at graduation. However, this trajectory can be extended post-study by delivering additional Build to Rent (BTR) accommodation. Co-living, for example, is a crucial component of this – given the affordability that this sector can offer. Of the final-year students moving into a rented property post-graduation, 60% indicated that they would consider living in a purpose-built development.
Existing BTR schemes benefit from central locations with excellent transport links. They come with amenities that save graduates money on memberships, and are also energy efficient, saving residents money on bills.
There are more than 122,000 complete and operational UK BTR homes. A further 59,000 are under construction and 102,000 have full planning permission granted, taking the total size of the sector to more than 280,000 homes. Around two thirds of BTR homes in the pipeline are located outside London, with Birmingham, Manchester, Leeds and Edinburgh demonstrating the highest concentration.
By providing high-quality accommodation, along with a defined career path and job opportunities, a city will fulfil two essential requirements for graduate retention.
Residential investors and developers are integral components in supporting this.
There is a significant opportunity to ‘ramp up’ the delivery of co-living and BTR accommodation across the UK. This could be the key to permanently unlocking graduate retention. If delivered correctly, this will become increasingly important in building human capital and creating an ecosystem to attract and retain talent in cities.