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Newer university towns in UK record highest property prices rises, study shows

These towns, where universities have been established since 1960 have seen prices rise from £91,612 to £155,953, a study by Lloyds TSB shows. Average house price growth in the more traditional, older university towns rose by a more modest 64%.

But both new and old university towns recorded higher average price increases than the 62% increase across the UK as a whole. More than two thirds of all university towns recorded house price increases in excess of the UK average.

Many new universities were formed when polytechnics converted to university status after 1992. The change in status enabled them to award their own degrees and thereby attract more students.

House prices have more than doubled in seven of these new university towns over the last decade. Bangor in Wales recorded the biggest increase at 129%, followed by Carlisle at 110%, Sunderland at 108% and Dundee at 107%. Pontypridd, home to the University of Glamorgan has seen a 106% increase, Bradford up 105% and Plymouth up 102%.

The most expensive new university town, and also the most expensive of all university towns, is Winchester with an average house price of £364,667, followed by Kingston upon Thames at £360,331 and Buckingham at £330,795. The least expensive are Salford at £106,685, Paisley at £106,967 and Bradford at £108,282.

Despite the success of the newer establishments, older university towns have also recorded significant house price growth. In Aberystwyth the average house price has increased by 144%, making it the top performer of any university town. Hull saw the next biggest rise amongst older university towns, and the third amongst all universities, with the average price increasing by 119%, followed by the historic Scottish university cities of Aberdeen at 118% and Edinburgh at 103%.

The ancient university town of Cambridge has the most expensive homes amongst old university towns outside London, with an average price of £291,079. Oxford at £258,531 and Reading at £248,076 have the next highest average prices. Hull is the least expensive old university town, and the second least expensive of all university towns, with an average price of £106,021.

Eleven of the university towns in The Times Top 20 University Rankings have seen average house prices rise by at least 75% over the past ten years. Edinburgh up 103%, Exeter up 91%, Loughborough up 90%, Leicester and Cambridge both up 88% and Lancaster up 84%.

‘Growing student numbers are likely to have had a positive impact on house prices in university towns over the past decade. This effect has been heightened in the newer university towns where prices have, on average, risen more rapidly than in the towns that host the more established universities,’ said Nitesh Patel, housing economist at Lloyds TSB.

‘Increased student demand for accommodation is also likely to have added to upward pressures on rental values in university towns, increasing their attractiveness to landlords,’ Patel added.