A ¡°sea change¡± in undergraduate admissions that has ¡°turned the market upside down¡± will continue to shape the English sector until the Westminster government looks again at unfreezing tuition fees, according to experts.

A record 41,000 students remained without a university place almost a month after A-level results day, after a sharp reduction in elite institutions¡¯ intakes dragged down the overall entry rate for 18-year-olds in England, Northern Ireland and Wales for the first time since 2012.

Lower tariff universities have capitalised as higher tariff providers scaled back expansionist ambitions because of the increasingly difficult economics of providing places to UK-based students.

With disappointment due to increased competition likely to remain a feature of the UK system in the coming cycles, ¡°next year will show if this sea change in the admissions environment starts to depress demand¡±, according to Mark Corver, co-founder of DataHE and former director of analysis and research at Ucas.

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¡°The cuts in entry to higher tariff universities have been savage for young UK students,¡± he said. ¡°Demand was up by 5 per cent, but intakes this year have been slashed by 12 per cent. Yes, this is from unusually elevated levels in recent years, but that is no consolation for this cohort which has experienced an unprecedented year-on-year reduction.¡±

Some of those who missed out compromised, and large numbers took up places at lower and medium tariff providers via clearing, Mr Corver noted. But others seem to have decided against going to university at all.

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What the tens of thousands of unplaced students decide to do next will be a key question that could indicate how future recruitment cycles are going to play out, according to Matthew Andrews, pro vice-chancellor for governance and student affairs at the University of Gloucestershire.

¡°This is a group that generally has much higher grades than their predecessors and expect a university place which matches these grades,¡± he said.

¡°I don¡¯t think the level of aspiration to attend university has reduced at all¡­but we need to think carefully about the structure of the sector.

¡°We have on the one hand excellent universities with places available but students not wanting to go there, and on the other we have institutions that have filled up to the extent that it has made maintaining aspects of quality unsustainable.¡±

While there had been a certain level of redistribution this year, lower and medium tariff universities still had more to do to demonstrate that excellence can be found in all institutions to combat the ¡°corrosive¡± obsession with a small band of elite universities, according to Dr Andrews.

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Mr Corver said lower tariff providers were likely to be encouraged by increasing both their overall recruitment for the first time since 2015 and their share of the key markets, including international students and 18-year-olds.

While continuing to suffer because of a decline in the number of mature students, strong recruitment this year will ¡°at least keep real levels of total income constant, even if the amount to spend on each student falls¡±, Mr Corver said.

¡°For providers, this is the cycle where supply issues have turned the market upside down. With teaching UK students now being loss-making for some, getting more of them is no longer the objective if you have other options,¡± he explained.

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The coming cycles will be characterised by an increase in the number of 18-year-olds owing to demographic changes, but universities have been prevented from investing in capacity to accommodate this because of the ¡°long-running stalemate on how to pay for higher education¡±, according to Mr Corver.

¡°If the economics of providing university places do not improve, university applicants are likely to be facing an unappetising combination of it being more difficult to find a place, and a university experience increasingly shaped by low resource when they get in,¡± he said.

The regulator Ofqual has signalled its intention to continue to deflate grades over the next examination cycle and return the distribution to 2019 levels in 2023. Mike Nicholson, deputy head of education services at the University of Cambridge, said the ¡°challenging¡± 2022 cycle showed the importance of having clarity on how this will work ¡°as soon as possible¡± to allow universities to more accurately predict how many offers they need to make to fill available spaces, ¡°which will provide a lot more stability to the process¡±.

Mr Nicholson said his key advice for future students was to use their five choices to apply to a range of universities and offers, ¡°not cluster towards five highly popular and oversubscribed courses¡±.

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tom.williams@timeshighereducation.com