As a new flock of students begin their first academic year at university armed with their newly purchased books and mass of home comforts, it has been revealed that property prices in university towns have reached a record high.
A new report released by Halifax shows that the typical cost of a property in one of the UK’s 65 university towns has risen by 22.5% - that’s £1,074 a month since 2014, rising from £172,179 to £210,845.
The top performing town was Guildford, home to the University of Surrey. Property prices in the town surged from a massive £105,362 to £511,673 over the last three years, making Guildford the most expensive university town in the UK.
Also making the grade were Winchester, with an average house price of £458,228, followed up by Uxbridge at £441,273, Oxford at £424,258, and Cambridge at £397,170.
At the other end of the scale, the least expensive university town was Paisley where the University of West Scotland is located, with an average property price of £122,681. Also bottom of the class were Bradford, Hull and Sunderland.
Russell Galley, managing director of Halifax Community Bank, said: “While it is well documented that the student housing market can be lucrative for private landlords receiving monthly rental incomes, this research also indicates the potential earnings from bricks and mortar alone.”
While the demand for University places and student accommodation is certainly a factor in the property price growth, the rise will also be due to the general increase in property across certain parts of the UK - house prices have increased by 18% across the UK as a whole. It’s not surprising that those University locations seeing record growth are situated in the South where house prices are typically stronger.
Property is definitely something to consider investing in while your child attends University. Your child won’t have to cover the costs of paying rent, while additional tenants can also provide an additional income. The capital gains received once your child completes university could be enough to cover their tuition fees.
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Guru Top Tip: Like all investment, you need to weight up and pros and cons. While news of house prices increasing since 2014 are being reported, you need to be aware of the growth implications of the upcoming years. Future house price inflation is expected to be slower, with many economists predicting gains of just 2% for 2017 and 2018. Coupled with the cost of stamp duty on a second home, you need to consider your options, and location, carefully.