University cities are expensive

According to a recent study of the least affordable places to live, Oxford, Guildford and Winchester are again high on the list, as are several other University Cities.

On average both tenants and home owners can expect to spend 32.9% of their income on rent or mortgages. This new study compared average advertised salaries with average rental figures across the UK to formulate the latest lists of the most and least affordable places for renters to live.

London, as expected, is top of the list and there are some other familiar towns and cities where employees can expect to spend the largest proportion of their salaries on a place to live.

1. London 40.8%

2. Oxford 39.1%

3. Wirral 37.25%

4. Brighton 36.6%

5. Guildford 36.4%

6. Milton Keynes 35.4%

7. Chichester 33.4%

8. Winchester 32.9%

9. Edinburgh 27.6%

10. High Wycombe 27.1%

The study assumes that the cost of monthly rent is equally split between two people sharing a home.

The smallest proportion of people’s salaries spent on rent using the same criteria in towns and cities is equally fascinating with noticeably more northern cities making the top 10 list.

1. Swindon 11.5%

2. Bradford 11.8%

3. Hull 11.9%

4. Dudley 12.8%

5. Durham 12.9%

6. Stoke-on-Trent 13.6%

7. Middlesbrough 14%

8. = Rochdale 15%

   = Derby 15%

9. Belfast 15.3%

The phenomenon of elevated property prices in these areas can be attributed to several interrelated factors.

Firstly, the presence of a university itself is a significant driver of demand. Universities attract a large population of students, academic staff, and support workers, all of whom require accommodation. This consistent influx of people creates a steady demand for housing, both in the rental and buying markets. In towns like Oxford, which is home to the prestigious University of Oxford, this effect is particularly pronounced due to the international reputation of the institution, drawing students and academics from around the world.

Secondly, university towns often offer a rich array of amenities and cultural experiences, enhancing their attractiveness as places to live. For instance, Guildford, home to the University of Surrey, boasts a vibrant cultural scene, with theaters, galleries, and a bustling high street. These amenities not only cater to the student population but also attract tourists and other visitors, further boosting the local economy and, by extension, property values.

Thirdly, the educational reputation of these towns contributes to their desirability as places to settle for families. Parents often seek to live in areas with access to prestigious schools and universities, hoping to secure the best possible education for their children. Towns like Winchester, renowned for its excellent educational institutions, including the University of Winchester, become prime locations for such families, driving up demand for housing.

The limited supply of housing in these areas exacerbates the situation. Historic towns like Oxford and Winchester have stringent planning regulations and conservation concerns, which can restrict the development of new housing. This limited supply against a backdrop of high demand naturally leads to higher property prices and rental costs.

Moreover, the student population itself influences the housing market in unique ways. The demand for student accommodation leads to the conversion of residential properties into student rentals, which can reduce the availability of family homes and push up prices. Additionally, investors often buy properties in these areas to rent out to students, viewing them as lucrative investments due to the consistent demand. This investor activity can inflate property prices further.

Finally, the overall economic impact of universities should not be underestimated. Universities often are among the largest employers in these towns and contribute significantly to the local economy. This economic vitality attracts more businesses and professionals to the area, again increasing the demand for housing.

The high cost of living and property prices in UK university towns like Guildford, Oxford, and Winchester are the result of a complex interplay of demand driven by the educational institutions themselves, the cultural and economic vitality they foster, the desirability of these locations for families, limited housing supply, and investor activity. These factors combine to create a competitive and expensive housing market in these historic and culturally rich towns.

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