Coventry’s average house price could rise as a result of parents of students buying second homes or buy-to-let properties for accommodation for their children.
Coventry University and Warwick University are both based in or near the City and have seen their reputation and student numbers grow in recent years. In terms of rankings both Universities have risen with 2016 league table positions having Warwick University currently at 6 and Coventry University at 15 – University League Tables 2016This rising popularity could have a knock-on effect for first time buyers. Research by an an online property agency revealed average property prices in the UK’s top 50 university cities have risen by more than 27 per cent over the last three years.
The online agency says it is likely values will continue to rise at a similar rate over the next three years. Currently the average house price in Coventry is about £154,000. If the rise of the last three years is matched then house prices in Coventry could increase by £27000 over the next three years.
Coventry has been identified as one of the university cities where if parents could afford to buy a second home or buy-to-let property for their child to live in while they are studying then they could cover at least part of the cost of tuition. This is based on the house price growth over the duration of their three-year degree which have tuition fees of £27000.
Be cautious with predictions and consider tax and costs
The research looked at how local property markets have performed since 2013 to calculate potential price growth over the next three years, for students starting university in September. It is by no means certain to suggest that the rate of home price growth recorded over the past three years will be repeated over the next three years.
The research also fails to take capital gains tax in to consider along with estate agent fees.
There are other factors to consider as past performance does not always predict future performance.
The presence of increasingly popular universities in a city can definitely influence Coventry’s average house price.
A healthy property market should support a strong supply of first time buyers. The prospect of parents buying houses for their student children may happen in the city but anyone thinking about this should also consider tax and professional fees for estate agents and solicitors.