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Education, Location, Location

Catherine Deshayes

University towns topped the league table of property hotspots for both buyers and renters this month, with Lincoln, Oxford and Southampton nabbing gold, silver and bronze for the most in demand rental towns.

Buy-to-let landlords are well aware that the student rental market is a lucrative one as rental demand will always be strong.

Student properties remain an attractive long term investment because the ever growing number of young people entering into higher education guarantees tenant demand and the rent achievable on properties rented room by room to several students is often higher than if the property was rented to a family. 

The property markets in student towns have held up better than many other areas during the current downturn because they appeal to professional buy-to-let investors, who don't need to borrow so much to finance the property as owner-occupiers usually do.

The 8th Halifax University Town House Price Review, which tracks house price movements in 64 university towns across the UK, found that 23 university towns saw price rises of more than 50 per cent.

Three university towns saw average house price rises by over 100 per cent during five years. These are Belfast (105 per cent increase), Dundee (101 per cent increase) and Bangor (100 per cent increase).

A further twenty university towns saw average house price growth of at least 50% in the same five period, ranging from Stoke on Trent to Preston, Bradford and Aberdeen.

Guildford is the most expensive university town with an average house price of £363,503, rising from £285,592. This is followed by Winchester, home to University of Winchester, with an average house price of £343,332, and Bath at £326,403.

The least expensive university towns are Hull (with an average house price of £124,108), Stoke on Trent (£130,336) and Bradford (£131,464).

Nine university towns have an average house price premium in excess of £20,000 when compared to their county.  The highest premium is in Winchester where the average house price exceeds the county (Hampshire) by £114,489 or 50 per cent.

Nitesh Patel, Economist at Halifax, said, "Over a third of the university towns in this review experienced average house price growth of over 50 per cent over the last five years.

"While it can be a good investment, the decision to buy a property for a son or daughter at university ultimately depends on the parents' personal circumstances and property prices around the university in question."

Each town on Propertyfinder.com's top twenty most searched for list in August was home to a major university campus.

The university towns of Lincoln, Oxford and Southampton topped the tables for the most demand for rental properties. 

Director of propertyfinder.com, Nicholas Leeming, said, "A-level results came out earlier this month, and since then there has been a scramble to secure privately rented accommodation by students applying through clearing. 

"Often late applicants are not eligible for university accommodation, so while most students will have had their accommodation for the year secured some time ago, those who didn't achieve the results they expected have been busily looking for places to live before the start of term.' 

"However, investors should choose the location of their properties carefully because students do not make good neighbours.

"Students want to stick with students, and if you are buying a property with the intention of renting it to students you should make sure you opt for an area of town where they typically congregate. 

"Not only will this maximise the appeal to your potential tenants and generate better rent, but it could save you a lot of ear ache. 

"In our surveys of home owners, students are consistently voted the worst neighbours, second only to squatters - so if you don't want calls from irate neighbours, try and buy a property that you know is surrounded by other student properties," added Mr Leeming.