Property prices in the UK's top university cities

by Housesimple on 3rd September 2018

Average property prices in the UK's top 50 university towns and cities* have risen by £28,725 since 2015, according to our research. And in more than half of these towns, average house price rises since 2015 would have funded a three-year degree course.

We looked at how house prices have performed since students who have just graduated, started their three-year degree courses in 2015. Only the UK's top 50 ranked universities, according to The Guardian*, were considered. If parents had bought a second home or buy-to-let property, to rent to students or for their child to live in during their studies with friends, in 56% of these towns and cities, house price growth would have covered the entire £27,250 cost of tuition for a three-year degree course.

The research reveals that property prices in Coventry, which has the 13th ranked university in the country, have increased by 61% between June 2015 and June 2018, according to Land Registry figures**. An average property in Coventry would have set parents back £114,625 in 2015, and today would be worth £184,690. That's an increase of £70,065 in three years which would have easily covered the £27,250 tuition fees for two children at Coventry University, with money left over to pay for a few beers!

Similarly, in Manchester (34th ranked university in the UK), the current average property price is £174,044 , up 26.7% or £36,626 , since 2015. Essex (31st ranked university), Bristol (20th and 37th ranked) and Kent (35th ranked) have all seen average house prices increase more than £53,000 since 2015, which is twice the cost of funding a three-year degree.

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If the that average rate of growth continued at the same level for the next three years, parents with children heading to any of these universities in September could purchase a buy-to-let property and fund the entire degree course with money left over for living costs, from house price growth alone.

Cambridge (£37,594 price increase) and Oxford (£28,028), the top two ranked universities in the UK, have both seen average property prices since 2015 rise more than the £27,250 cost of a three-year degree. However, current average property prices in Cambridge are £440,126 and £402,020 in Oxford, much higher than many of the other university towns, and possibly out of reach of all but the richest few who might consider the buy-to-let route.

The following table shows the UK university towns and cities with the best performing property markets over the past three years.

University *Average house price in 2015\** ** *Current average house price 2018\** ** Price increase from 2015-2018 % increase in house prices since 2015
Coventry £114,625 £184,690 £70,065 61.1%
Manchester £137,418 £174,044 £36,626 26.7%
Essex (Colchester) £211,799 £267,124 £55,325 26.1%
Bristol/UWE Bristol £218,579 £272,545 £53,966 24.7%
Kent (Canterbury) £245,101 £303,835 £58,734 24.0%
Birmingham/Aston £146,874 £181,241 £34,367 23.4%
Nottingham/ Nottingham Trent £111,562 £136,565 £25,003 22.4%
Loughborough £189,937 £224,442 £40,505 22.0%
Southampton £175,422 £213,167 £37,745 21.5%
Portsmouth £175,216 £208,599 £33,383 19.1%

The following table shows UK university towns and cities ranked by increase in average house prices. Only areas where average house prices are below the UK average have been considered (UK HPI June 2018 – average UK house price was £228,384).

University *Current average house price 2018\** ** Increase in house prices since 2015 (and potential increase over next three years)
Coventry £184,690 £70,065
Loughborough £224,442 £40,505
Southampton £213,167 £37,745
Manchester £174,044 £36,626
Birmingham/Aston £181,241 £34,367
Portsmouth £208,599 £33,383
Leeds £181,241 £28,176

The following table shows UK university towns and cities that have seen the biggest house price rises since 2015, irrespective of the current average property price:

University *Current average house price 2018\** ** Increase in house prices since 2015 (and potential increase over next three years)
UCL (Camden) £882,365 £112,211
Coventry £184,690 £70,065
Royal Holloway (Runnymede) £414,065 £64,824
Kent £294,807 £59,087
Bath £335,481 £55,360
Essex (Colchester) £267,124 £55,325
Bristol/UWE £272,545 £53,966
Sussex (Brighton) £363,639 £53,739

Sam Mitchell, CEO of **comments:"Tuition fees are a stark reality now and the cost of a three-year degree at many universities is fast approaching £30,000. Add on top of that accommodation costs and general living expenses, and studying for a degree is leaving many students facing years of financial hardship when they graduate.

"Even though tuition fees are generally funded by student loans, it's still a financial chain around any young person's neck. And many parents have no choice but to help their kids through higher education. We are also seeing more grandparents offering financial support to their grandchildren by either dipping into their pension income or giving an early inheritance. Degrees can hurt financially across generations.

"Buying a property in the town or city where your child is studying could provide a possible solution and give your offspring a debt-free start in life. There's a good chance parents of undergraduates will be expected to help cover the cost of rent, tuition or both. By investing in a second home, your child won't have to pay living costs, as the rent will cover that, and the increase in capital value could cover the cost of tuition fees.

"Of course, there's no guarantee house prices will continue to rise in many of these university towns and cities, but even if the rate of growth slowed, your child could still live rent free in the property with friends."

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