The UK’s most affordable university towns

The most affordable university towns in the UK for housing are Newport (where the University of Wales is based) and Hull (the centre for Hull University as well as catering for the University of Lincoln, according to the 8th annual Lloyds Banking Group University Town House Price Review, which tracks house price movements and affordability in 62 university towns across the UK, except those in Central London.

In both of these towns the average house price to earnings ratio was 3.3 in the second quarter of 2009. These were followed Bradford, Durham, Plymouth, Pontypridd and Middlesbrough; the house price to average earnings ratio is below the national long-term historical average of 4.0 in all five towns.

A university town is classified as affordable if the average house price in the town is lower than the price a single income, male full time employee can pay, based on the historical house price to average earnings ratio of 4.0. The review is compiled using information from the Lloyd’s housing statistics database, combined with earnings data from the Office of National Statistics, and tables from the Times Good Universities Guide 2009 Table and the Higher Education Statistics Agency.

According to Lloyds, average house prices in university towns in the Top 20 of the Times Good University Guide 2009 increased by 117% between June 1999 and June 2009. This is a slightly higher rise than the UK average of 113% during the same period. The highest house price growth was in Bath (194%), Exeter (188%), Cambridge (163%), Lancaster (143%) and Edinburgh (142%).

The Lloyds report cites the growth in the number university places for students, the extension of university status to former colleges of higher education and the economic benefits they have brought as the driving factors behind the growth in university town housing markets. Just over 90% of university towns in the survey (57 towns out of 62) have seen average house prices at least double over the past decade.

Nitesh Patel, housing economist at Lloyds TSB, said:

“In the past decade 90% of the UK’s university towns have seen house prices at least double. The number of full time students has increased by a quarter to 1.48 million in 2008 over this period, boosting the demand for property.”

“With student numbers set to increase further over the next few years, there will be further pressure to increase student accommodation. This has already led to the increased development of purpose built student housing, which should take some of the weight off the local housing market.”

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