When it comes to looking for property investment opportunities in UK university hubs, there are three cities that have IP Global’s stamp of approval in 2023. These cities not only attract a constant influx of students but also benefit from a diverse range of amenities, cultural attractions, and strong rental demand. In this blog post, we will explore some of the top university cities in the UK that are considered favorable for property investment. Whether you're a seasoned investor or a first-time buyer looking to make a sound investment, this guide will provide you with valuable insights into the potential benefits and key factors to consider when exploring property investment opportunities in these vibrant academic hubs.
UK Universities: World-Class Education and Investment Potential
The UK's top-tier universities consistently rank among the best globally, with four in the top ten according to QS World University Rankings 2022. UK institutions contribute over 14% of the world's highly cited research papers. High international student satisfaction and strong graduate employability further highlight the quality of UK universities.
To secure your financial future while studying in the UK or planning for your children's education, consider investing in property in university towns. There are pockets of value to be found in these areas, providing financial stability with consistent elevated demand and rent price growth. Real estate has historically been a secure investment asset with long term price growth that surpasses other investment assets. For example over the last decade, IP Global's key UK cities outperformed the FTSE 100 in property price growth as seen in the graph below.
1. Oxford: Home to the World’s Consistently Best-Ranked University
Oxford, home to the UK's first university, is the crown jewel of global education. Its world-renowned educational offerings have attracted students from all over the world for centuries. With approximately 43,000 full-time students, a third of whom are international, they make up about 27% of the city's population.
Educational Overview of Oxford
Oxford is home to two top-class universities, most notably the University of Oxford, which is consistently ranked number 1 in the world. The newer Oxford Brookes University was recently ranked 6th in the UK for teaching by the Times Higher Education Young University Rankings. The University of Oxford is comprised of 39 semiautonomous colleges, 5 private halls, and an array of academic departments organized into four divisions. The university has 20,967 full-time students and is estimated to support 50,000 jobs across the UK. The university is also responsible for some of the finest research in the world, with 87% of its research rated as world-leading or internationally excellent.
The Investment Fundamentals for Real Estate in Oxford
Oxford has experienced sustained population growth and long-term economic growth, leading to a 9.7% increase in house prices in 2022 and a 68% increase over the last 10 years. With these underlying factors expected to remain in place in the coming years, Oxford makes for a fantastic opportunity to invest in real estate. It is forecasted that Oxford's house prices will continue to increase by a further 26% in the 10 years following 2022. This outperforms the UK average expected house price growth between 2022 and 2032, which is projected to be 21%.
Oxford is struggling to keep up with the exceptional levels of demand for its housing. The city requires 544 new homes per year to keep pace with its growing population however only delivered an average of 227 per annum between 2016 and 2022. Delivering just half of the homes needed. This is underpinning property prices and is forecast to persist in the medium to long-term as the city fails to meet its needs.
Take a look at our latest scheme in Oxford, The Stormont.
2. Edinburgh: A Historic Powerhouse For Education With Darwin’s Seal Of Success
Edinburgh is a global centre for education, boasting 6 universities. With such a large number of universities, students make up over a tenth of the city's population, and the city attracts top academics from around the world. The three largest universities in Edinburgh are the University of Edinburgh, Edinburgh Napier University, and Heriot-Watt University.
Educational Overview of Edinburgh
The University of Edinburgh is by far the most prestigious of the city's universities, ranking among the Top 30 in the world and outranking institutions such as King's College London and the University of Hong Kong. It is one of the top research universities in the UK, with 38% of its research rated as ‘World Leading’ and a further 45% rated as ‘Internationally Excellent’.
Heriot-Watt University is a large campus university located just outside Edinburgh's western ring road. It was the world's first mechanics institute and specializes in physics, engineering, and technology. The university has additional campuses in Dubai and Malaysia.
Edinburgh Napier University is situated on the west side of the city. Although its origins date back to the 1960s, the institution only gained university status in the early 1990s, making it one of the younger universities in Edinburgh and Scotland. In 2022, the university was named the #1 Modern University in Scotland.
The Investment Fundamentals for Real Estate in Edinburgh
Edinburgh’s global popularity is applying pressure to its already strained housing market. In the year to October 2022, average rents in the city increased by 14.7% and are forecast to increase a further 16.4% between 2023 and 2027 making for a prime property investment opportunity.
Despite significant construction activity, the housing supply has failed to keep up with demand. From 2012 to 2020, only 19,483 units were added to the housing stock, while 46,954 units were required. This has resulted in a substantial shortage of residential homes, with only 41% of the city's housing needs being met over the past 9 years. It is anticipated that there could be a shortage of at least 29,000 housing units by 2031 which lays down a strong investment case for future property price growth in the city.
If you’d like to learn more about opportunities IP Global have in Edinburgh, take a look at our latest brochure here.
3. Sheffield: A City On The Rise Cultivating Minds & Inspiring Futures
Sheffield's lifestyle has become a magnet for students from all over the world, thanks to its cultural diversity and world-class educational institutions. The city has been ranked 60th in the world and features on the list of Best Student Cities, according to the QS World University Rankings. Sheffield has a diverse student community, with over 22% of its 55,368 full-time students coming from outside the United Kingdom.
Educational Overview of Sheffield
The University of Sheffield (UoS) is a prestigious institution that attracts almost 30,000 full-time students, with 31% of those coming from overseas. The university is part of the influential Russell Group of research universities and is currently ranked within the top 100 in the world. Its research is highly regarded, with 86% of it rated as worldleading or internationally excellent.
Sheffield Hallam University (SHU) is located in the heart of the city and has over 25,000 full-time students, with 13% being international. The university has two significant campuses that offer more than 700 different courses. SHU is ranked 14th globally in the Times Higher Education Impact Rankings, which focuses on sustainable development goals. This year, the university is celebrating its 180th birthday.
The Investment Fundamentals for Real Estate in Sheffield
When looking for a strong real estate investment market, the economic growth plays an important factor in determining asset value longevity. Since the early 2000s, Sheffield has seen meteoric economic growth coupled with sustained population growth resulting in a 13.7% annual increase in house prices. These factors are expected to persist in the coming years, with prices in the region projected to rise by an additional 11.7% until 2027. Sheffield still presents a pocket of value, with prices averaging 9.4% lower than those in cities like Leeds, Birmingham, and Manchester as of September 2022.
The construction activity in Sheffield has been unable to meet the demand for housing caused by the substantial population growth since the early 2000s. From 2011 to 2020, only 7,600 units were added to the housing stock, bringing the total to 38,877 units as of 2021.
With an average of 760 dwellings added per year over the past decade, the council's goal of supplying 2,222 units per year until 2039 may appear highly ambitious. Consequently, with only 7,600 new units to accommodate a housing need growth of 31,542 units in the last 10 years, there is a significant shortage of new-build investment-grade properties in the city.
Are you eager to invest in Sheffield? IP Global have secured a city-centre residential tower with access to a multitude of amenities. Take a look at Langford Tower here.
Conclusion
In conclusion, when it comes to property investment in UK university hubs, three cities stand out as prime choices for investors. Oxford, Edinburgh, and Sheffield offer a combination of thriving student populations, diverse amenities, and strong rental demand. These cities boast prestigious universities, attracting students from around the world and ensuring a constant need for quality accommodation. If you have any questions about opportunities in these cities don’t hesitate to reach out here and we can talk you through the investment cases in greater details.
