According to the latest Higher Education Estates Management report from AUDE (Association of University Directors of Estates), the total higher education estate size has risen to c.246m sq ft across the country, a rise of 4% since 2016. The same report goes on to note that higher education property operating costs have risen for the last two years whilst, at the same time, capital expenditure across the sector is £1bn lower now than it was before the onset of the Covid-19 pandemic, suggesting cancelled or delayed projects.

The latest data from the Higher Education Statistics Agency (HESA) demonstrates that undergraduate student numbers have recently declined, and the latest data from the ONS also demonstrates that fewer overseas student visas are being issued. Combining the above points presents an uneasy picture of rising costs and falling income, which will impact how education estates are managed in the future. If we add to the above that many higher education establishments are aiming to achieve net zero carbon between 2035 and 2050, we expect to see greater emphasis placed on refurbishments related to decarbonising existing buildings that may also include an element of repurposing. Indeed, to combat the loss of income, many universities are looking to commercialise existing assets, and one area of recent focus has been partnering with the science sector to deliver R&D facilities to the benefit of both parties. Cambridge University would be a good example of this, with recent projects with both CUH Trust and AstraZeneca.

With higher education energy costs increasing from £589m in 2021 to £869m in 2023, it is clear radical thinking is required to decrease the burden so investment can be made elsewhere, but with just 1% of universities energy coming from on-site generation, it would seem little progress has been made, albeit this does suggest an area of high future potential growth to be examined.

Moving away from higher education, the imposition of VAT on private school fees has been hotly debated in the press over recent months. It will take time for detailed statistics to filter through regarding income and student numbers, but it is not out of the realms of fantasy that the issues stated above for the higher education sector will filter through to public and independent schools in the short-to-medium term.

As with other sectors, the price of raw materials, particularly steel, will have a dramatic impact on overall build costs. The latest Construction Markets survey commissioned by the BCSA and Steel for Life shows that, in 2024, steel frames accounted for 59.5% of all education construction in the UK compared to 19.6% for in-situ and precast concrete and 18.5% for load-bearing masonry.

Build programme will be a consideration for all construction projects, but it tends to be a key driver for education projects due to the constraints of the academic calendar and the common requirement for new or refurbished space to be provided to coincide with the beginning of an academic year. This can result in contractors and subcontractors having a large number of projects to tender and construct, all with similar timeframes, which can result in some variations in pricing.

_{Read the articles within Savills Build: Perspective report below}