Lloyds TSB Finds New Students Boosts House Prices In University Towns

LONDON, ENGLAND, September 08, 2010 (Press-News.org) The arrival of A Level results marks the scramble to fill university places across the UK. While most first year students get ready to settle into halls, some freshers will join their second or third year counterparts in opting for privately owned housing, boosting the local market, according to new analysis from Lloyds TSB.

More than half (60%) of university towns across the UK have seen house price growth outperform the region in the past 5 years, with the biggest increases appearing in towns that have seen a real uplift in the number of students over the same time.

- Aberdeen - home to 29,300 students- saw a house price gain of almost 40%; compared to 14% price growth across Scotland. This is coupled with a 54% increase in the student population.
- The University of Ulster campus is responsible for a 30% growth in student population in Coleraine since 2005 and has recorded a price increase of 34%, ahead of the 24% for Northern Ireland.
- In Winchester, prices rose by 30% in comparison to 2.5% in the South East - as student numbers in the town were boosted by 78%. The average house price of GBP385,713 is 114% above the UK average of GBP180,501.

However, it's more of a mixed picture for some of the UK's largest University Towns, despite an increase in student population:

- Edinburgh, having the eighth largest student population in the UK, has seen house prices rise by 11% in the last five years, as student numbers rose by over a third to 55,195.
- London and Glasgow recorded price growth of just 5% since 2005, although the student population rose by 76% and 43% respectively.
- Student numbers have risen by 66% in Birmingham, but house prices are 3% lower than 5 years ago and just over 11% below the West Midlands average.
- Leeds, Manchester and Nottingham have all seen their student population rise by over a third, but only the West Yorkshire city has an average house price above that of the region.

Nitesh Patel, housing economist at Lloyds TSB commented:
"Growing student numbers have had a big impact in boosting house prices in some university towns - where the increase in demand has led to the local market outperforming the rest of the region. However, it's a very mixed picture for some of the UK's largest university towns that have seen their student population increase significantly without impacting on house prices.

"In the past five years the population across the university towns in the UK has increased by nearly a million students. Naturally, this has boosted demand for property and land to provide suitable accommodation for students."

This increase in the student population has also had an effect on the number of student accounts being opened across all major banks. In addition, this has led to an increase in buy-to-let mortgage requests from those looking to capitalize on the rising population of students, as well as fuelling the trend towards using graduate loans to help people start making major investments at a young age.

Note: 1 includes only full time students enrolled with a higher education institutes for a postgraduate or undergraduate course. Figures are from HESA.

KEY FINDINGS

Largest Price Increases
- Seventeen of the 29 towns with the largest price increase are outside southern England.
- In southern England, the biggest increases were in Winchester (29%), Brighton (19%), Cambridge (17%) and Chelmsford (9%).

House Prices in University Towns and Regions
- At GBP385,713 the average house price in Winchester is 65% above the South East average of the largest amongst university towns.
- Winchester is followed Cambridge with an average house price of GBP264,616 (57% above the East Anglia average of GBP169,050) and Ormskirk (51% above the North West average of GBP140,120.
- In Portsmouth the average house price of GBP149,676 is 36% lower than in the rest of the South East. The south coast town is followed by Plymouth (25%) and Hull (23%).

House Prices by Property Type
- Detached and Semi-detached properties in Aberdeen saw the largest house increase of 47% and 44% respectively in the 5 years to June 2010.
- Detached and semi-detached properties tend to have the most rooms and are therefore attractive for providing student accommodation.

Website: http://www.lloydstsb.com