I found out recently that there is a shortage of UK students for some PhD programmes. I got the impression also that universities are therefore under a bit of extra pressure to fill studentships with home people. I would like to think that I have been offered my PhD place because I would have been selected anyway and not because professors are desperate! Does anyone out there feel the same?

I didn't till now!
Gee, thanks!

True or not, getting a PhD studentship is not the achievement you should be focussing on - it's getting the PhD. What does it matter if your supervisor only picked you because they were desperate as long as you produce good research and get a PhD at the end you've proved yourself worthy of the studentship.

Of course I am thrilled that I have my PhD studentship! I suppose I was kind of hoping that it was/is my insecurity that was making me think that way, and was therefore looking for some kind of reassurance (haha) that I was actually selected on merit - because embarking on a PhD is in many ways a daunting prospect after all, and the last thing I need is to begin my PhD with the nagging insecurity that maybe my supervisor has made a mistake by selecting me.

I kinda feel the same way, as I dont know if my supervisor chose me because of my "home" status or because he couldn't get anyone else to fill the position. The way I look at it is that I am going to grab this great opportunity with both hands and do the best I possibly can and to make the most of it, regardless of the reasons that I was selected for the studentship!

A bad or poor PhD student is a drain on the resources of the whole research group. No supervisor will appoint a student that they feel is incapable of acheiving a PhD, or that they think is likely to become a pain. Take your appointment as a compliment, there are many factors which will have governed your appointment, being a home student is just one of them.