Student factor boosts university city home values

AFS Team·19 August 2011·3 min read
Student factor boosts university city home values
House prices in university cities are outpacing other cities as record numbers of students look for somewhere to live from home and abroad look for somewhere to live in term time. Despite the housing slump following the credit crisis, average prices in university towns and cities have soared ahead of everywhere else. In 10 years, homes have increased by 70% in towns and cities that have established new universities since 1960 - from an average £91,612 in 2001 to £155,953 in 2011. At the same time, prices in other more established university towns and cities have dropped behind the newcomers, but still increased 64% against a national average price rise of 62%. Overall, more than two-thirds of university locations beat the average UK house price rise. Top university towns and cities where prices at least doubled in the past 10 years are: • Aberystwyth (144%) • Bangor, North Wales(129%) • Hull (119%) • Aberdeen (118%) • Carlisle (110%) • Sunderland (108%) • Dundee (107%) • Pontypridd (106%) • Bradford (105%) • Edinburgh (103%) • Plymouth (102%) The most expensive homes are not necessarily in the places recording the largest price increases: Winchester is the most expensive university city with an average house price of £364,667, followed by Kingston-upon-Thames (£360,331) and Buckingham (£330,795). The cheapest university town homes are in Hull (£106,021) - which also recorded the third highest price increase - Salford (£106,685), Paisley (£106,967) and Bradford (£108,282) - the city recording the ninth highest price increase. Lloyds TSB compiled the figures, and Nitesh Patel, the bank’s housing economist, said: "Growing student numbers are likely to have had a positive impact on house prices in university towns over the past decade. “This effect has been heightened in the newer university towns where prices have, on average, risen more rapidly than in the towns that host the more established universities. Increased student demand for accommodation is also likely to have added to upward pressures on rental values in university towns, increasing their attractiveness to landlords." Average house prices for 11 places in The Times Top 20 University Rankings had average house prices go up by 75% or more during the last decade. Top place went to Edinburgh (103%), followed by Exeter (91%), Loughborough (90%), Leicester and Cambridge (both 88%) and Lancaster (84%). The average house price increase for all 20 university towns and cities (excluding London) was 73%.