While the government’s Planning & Infrastructure Bill promises to “get Britain building again” by speeding up planning decisions and better resourcing local planning authorities, faster will not necessarily mean easier. The UK education estate is entering a period of heightened pressure.
According to Office for National Statistics (ONS) figures published in 2023, national expenditure on UK research and development has been rising steadily, reaching £70.7 billion in 2022.
UK Research and Innovation (UKRI) confirms that since 2011, joint public and private sector strategic investments in the Biotechnology and Biological Sciences Research Council (BBSRC) Research and Innovation Campuses have delivered over £200 million of infrastructure.
Research by Legal & General’s Investments and Venture Capital arm suggests that the UK university spin-out sector is a highly impactful asset class, offering exposure to growth businesses in key industries such as healthcare, clean energy, and advanced computing. These benefits are tied to maturing ecosystems centred around leading university hubs; with supportive government policies, this momentum looks set to continue.
Campus development will ultimately succeed or fail based on alignment with local planning policies, sustainability credentials, and demonstrable community benefits.
Demand-side pressures are also becoming more apparent. International student numbers have softened in recent years: in the year to June 2025, student visas were down 4%, while dependent visas fell by 81% following policy changes. Even with tentative stabilisation in early 2025 applications, volatility has become the baseline, challenging estates and financial strategies that depend on consistent international student flows.
Cost pressures compound these challenges. The UK remains one of the most expensive construction markets globally, with tender price inflation projected at 2–4% through 2025. At the same time, a large proportion of the education estate is now categorised as being in “poor” condition, escalating maintenance liabilities.
These dynamics are not confined to higher education. Independent schools face their own financial pressures.
The funding challenges in the private education sector are clear. Even well-established schools are under threat, highlighting the impact of reforms to the tax regime. Since 1 April 2025, independent schools have no longer benefited from VAT exemptions on tuition and boarding fees, and those with charitable status have lost eligibility for business rates relief. Faced with higher costs, schools are passing some of the burden on to parents while absorbing some themselves, which is squeezing margins. Think-tank modelling suggests pupil losses of 3–7% are plausible over the medium term.
Independent schools often hold substantial real estate assets, including heritage buildings, boarding houses, and sports facilities — all costly to maintain. With tighter cash flows, many may defer maintenance and renovation, sell surplus land, or consolidate sites to reduce overheads.
If significant numbers of pupils move from independent to state schools, some local authorities could face demand surges, shifting the burden of facilities expansion or retrofit onto the state sector.
Thaddaeus Jackson-Browne
Director – DLP Planning
BA (Hons) Dip TP MRTPI
07502 498 880
Thaddaeus.Jackson-Browne@dlpconsultants.co.uk
dlpconsultants.co.uk
linkedin.com/dlp-planningltd
Demographic change will add to these pressures. England’s population profile is shifting, with falling birth rates since the mid-2010s already reducing the number of pupils entering primary schools. The Department for Education projects that primary rolls will continue to contract through the late 2020s, reflecting smaller cohorts moving through the system. This trend will feed into secondary schools from the early 2030s, easing some urban pressures unless inflows from the independent sector offset that decline.
This creates a long-term structural effect: fewer school-age children relative to the wider population, with regional variation. London and some major cities are expected to see the sharpest pupil declines, whereas areas with higher birth rates or sustained inward migration may maintain more stable rolls.
For schools, falling rolls pose financial risks, as per-pupil funding formulas reduce income. Surplus places may lead to consolidation, site closures, or repurposing of education real estate. The need to balance localised demand with investment in facilities cannot be overlooked. Too often, falling pupil numbers are taken as a reason to scale back investment, overlooking the qualitative improvements required to meet pupils’ needs and provide them with the best possible educational platform.
Overall, the education real estate sector faces a period of significant change as institutions adapt to economic realities shaped by higher tax burdens, elevated construction costs, and shifting enrolment patterns.
