Saturday 30th August 2008

Twenty Three University Towns See House Price Rises Of More Than 50%

Halifax has examined house prices over the last five years (June 2003 to June 2008) in university towns across five different categories:  house prices in university towns trading at a premium; most expensive university towns; least expensive university towns; house price growth at the Times Top 20 ranked universities; and size of student population and house price growth during the past five years.

Key findings of the research include:

• Three university towns saw average house price rises by over 100% during five years; these are Belfast (105% increase), Dundee (101%) and Bangor (100%).
• A further twenty university towns saw average house price growth of at least 50% in the same five period; ranging from Stoke on Trent (52%), Preston (53%), Bradford (94%) and Aberdeen (95%).
• Guildford is the most expensive university town with an average house price of £363,503, rising from £285,592.  This is followed by Winchester, home to University of Winchester, with an average house price of £343,332, and Bath (£326,403).
• The least expensive university towns are Hull (with an average house price of £124,108), Stoke on Trent (£130,336) and Bradford (£131,464).
• Nine university towns have an average house price premium in excess of £20,000 when compared to their county.  The highest premium is in Winchester where the average house price exceeds the county (Hampshire) by £114,489 or 50%.

Nine university towns in the UK have an average house price premium in excess of £20,000 when compared to their county. These include Winchester (£114,489 or 50%), Bath (£98,562 or 43%), Cambridge (£90,699 or 44%), Warwick (£75,454 or 46%), Oxford (£39,797 or 14%), Newcastle (£25,005 or 16%) and Stirling (£20,296 or 13%). 

Most expensive University towns (Table 2) 

The ten most expensive university towns are in the South East.  The most expensive is Guildford (£363,503), followed by Winchester (£343,332), Bath (£326,403), Oxford (£323,946) and Cambridge (£295,581). These top five most expensive towns also feature within the top seven university towns in the UK which trade at a premium to their county.

Outside Southern England the most expensive university towns are Bangor with an average house price of £245,855, Warwick (£240,332) and Cheltenham (£237,868).

Least expensive University towns (Table 3) 

Hull, with a university student population of 22,275 from two universities (Hull and Lincoln), is the least expensive university town with an average house price of £124,108. It should be noted that average house price growth in Hull during five years was 79%.
 

There are eight other university towns with an average house price below £150,000.  These include Stoke on Trent (£130,336), Bradford (£131,464) and Salford (£148,338).

Strongest house price growth during the last five years (Table 4) 

Three university towns saw average house prices rise by over 100% during a five year period. The highest was recorded in Belfast where average house prices increased from £101,272 over the five year period to £207,669, a growth of 105%; followed by Dundee (101%) and Bangor (100%). 

Twenty other university towns saw average house price growth of at least 50% in the same five year period; ranging from Stoke on Trent where average house prices increased from £85,722 to £130,336 (52%), Preston (53%) Bradford (94%) and Aberdeen (95%). 

The 64 university towns in the survey recorded an average price growth of 42% over the five years, compared to the 44% rise for the UK as a whole.

House price growth during the last five years in the Top 20 Times University list (Table 5)

Eight towns within the Top 20 Times University list experienced more than 35% house price growth over the past five years.  Eight of these universities recorded average price growth of over 35% during this period.  The highest was in Durham, where the average house price increase was 59% followed by Newcastle (55%). 

Ten of the Top 20 Times University list had an average house price over £200,000; the most expensive being Bath (£326,403) followed by Oxford (£323,946) and Cambridge (£295,581).

Size of student population and house price growth in last five years (Table 6) 

Manchester, which has the largest student population of 73,160, recorded an average house price growth of 63% during the last five years. Liverpool, which has a student population of 53,705, saw average prices increase by 71% during the period.

However, university towns with a relatively smaller student population have also experienced large average house price increases.  Glasgow with a student population of 45,125 recorded average price growth of 74% and Preston with 29,845 students saw a price rise of 53% during the five years.

Nitesh Patel, Economist at Halifax, commented:

"Over a third of the university towns in this review experienced average house price growth of over (50%) in the last five years. 

"While it can be a good investment, the decision to buy a property for a son or daughter at university ultimately depends on the parents' personal circumstances and property prices around the university in question."

Ends.
 

Editors' Notes

House prices – Halifax House Price Index, crude average prices 2003 to 2008 (12 months to June in all cases).  Prices shown are the arithmetic average prices on which an offer of mortgage has been granted.  These prices are not standardised and therefore can be affected by changes in the sample from quarter to quarter. 

List of UK universities and the number of students in higher education in those institutions is from the Higher Education Statistics Agency. 

The Times Good University Guide ranks universities on eight key performance areas.  These are student satisfactions, research, quality, student-staff ratio, services and facilities spending, entry standards, completions, good honours and graduate prospects. 

"This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive.    We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report.  Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance.  © HBOS plc all rights reserved 2008."