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Student exodus could leave university cities 'ghost towns' by 2020

Press release: 20/04/2011

Some UK university towns could see student populations halve by 2020 as soaring tuition costs drive students home, experts predict.

New research from home insurer LV= reveals that parts of Newcastle upon Tyne, Lincoln and Sheffield, which rely heavily on university populations to boost their local economies, could become ghost towns as non-local students abandon them for cheaper study closer to home. The areas worst hit will be those with large student populations such as Jesmond and Moorside (Newcastle), Broomhill and Sharrow (Sheffield), and Boultham and Carholme (Lincoln). Other cities which will feel the impact of the student exodus include Swansea, Portsmouth, Stoke-on-Trent and Nottingham, with university student populations forecasted to decline by 40% in these areas.

The LV= research reveals that with average tuition fees expected to rise to more than £9000 per year by 2020, half (52%) of all younger students will choose a local higher education establishment and stay with their parents [1]. Only a fifth (21%) of UK full time students currently live at home, but this is expected to increase to nearly half of all students (47%) over the next decade.

Next year's tuition fee increases, coupled with declining numbers of 18-24 year-olds in the general population over the next decade, will see a 14% decline in British higher education student numbers over the next ten years. Research shows families' expectations have also been hit hard with the introduction of higher fees. One in twelve (8%) parents who previously hoped their child would go on to higher education now doubt they'll be able to [2]. Experts predict that once the student exodus begins in 2012, property values in many student towns affected will decline with rental prices plummeting. Crime and criminal damage will increase as a result, and many properties will become vacant and even derelict.

The shift to students living at home with parents suggests the emergence of a large new cohort of 'commuter students', who will make longer journeys to attend courses, in order to save money on living costs. However, the research shows that almost half (48%) of current stay-at-home students say that living at home has made it harder for them to feel fully involved in student life.

Some towns and cities however, could actually benefit from dwindling student communities elsewhere in the UK, LV='s research finds, with some areas with low existing populations set to see a boost as young people remain in the area for longer. Locations likely to attract the highest increases in students include Milton Keynes, St Albans, and Swindon.

In many cases, having students living at home could actually be a liability for parents. Stay-at-home students each keep an average of £2,500 worth of possessions at their family home, with only a third (33%) of these items covered by their parents' insurance. In addition, one in ten (12%) parents of live-at-home student children report an increase in wear-and-tear and damage to their house as a result of their child staying at home. LV= urges parents with children at university to ensure they are properly insured for all eventualities as students increasingly stay at home while they study.

John O'Roarke, managing director of LV= home insurance, said "The LV= student towns report shows how student life is set to be transformed over the next decade, as the impact of rising tuition fees forces university students to reassess their finances and living arrangements. With such a vast number of higher education students set to remain in the family home over the next ten years while they study, we’d urge parents to ensure they have adequate insurance in place to cover all eventualities – and not start redecorating the spare room just yet."

For more information, log on to www.lv.com.


Notes

All research taken from the 'Student Towns' report (March 2011), conducted by Nelson Research for LV= insurance. Additional data from the report available on request.

Original survey research, conducted with a nationally representative UK-wide sample of 1,047 current, recent and prospective Higher Education students and their parents. Interviews were carried out online, using respondents recruited from the Panelbase online panel, between February 26th and March 6th 2011.

Original survey data was used in conjunction with information from DCLG, the Government Actuaries' Dept., HESA, and PUSH, in order to create forecasts for the size and geographic distribution of the student and graduate population to 2030.

Table 1: Largest numerical declines in student population, by local area, 2010 to 2020

Rank

Area

UK HE students 2010

Forecast UK HE students 2020

Absolute change
2010-20

% change 2010-20

1

Newcastle upon Tyne

30,210

14,652

-15,558

-52%

2

Lincoln

10,425

5,945

-4,480

-43%

3

Sheffield

44,528

25,938

-18,590

-42%

4

Swansea

15,575

9,241

-6,334

-41%

5

Portsmouth

17,322

10,283

-7,039

-41%

6

Nottingham

34,353

20,522

-13,830

-40%

7

Stoke-on-Trent

10,073

6,064

-4,009

-40%

8

Exeter

11,273

6,894

-4,379

-39%

9

Welwyn Hatfield

11,387

7,056

-4,330

-38%

10

Southampton

23,745

14,905

-8,840

-37%

11

Lancaster

13,186

8,312

-4,874

-37%

12

Norwich

11,810

7,475

-4,335

-37%

13

Runnymede

3,928

2,503

-1,425

-36%

14

Bath and North East Somerset

16,592

10,740

-5,852

-35%

15

Sunderland

10,101

6,589

-3,512

-35%

16

West Lancashire

8,856

5,802

-3,054

-34%

17

Liverpool

33,188

21,805

-11,383

-34%

18

Newcastle-under-Lyme

5,359

3,527

-1,832

-34%

19

Bournemouth

13,856

9,151

-4,705

-34%

20

Derby

11,202

7,485

-3,717

-33%

Table 2: Local areas showing increases in student populations to 2020
No local areas in the UK will see very large numerical increases in student numbers over the next ten years. Areas seeing large percentage increases in student population over the next decade will be those that only have relatively small student populations today.

Local areas ranked by numerical increase

Rank

Area

% change 2010-20

Forecast UK HE students 2020

Absolute change 2010-20

% change 2010-20

1

Wiltshire

5,139

7,171

2,032

40%

2

Shropshire

3,780

4,913

1,133

30%

3

Herefordshire, County of

1,904

2,785

881

46%

4

Harrogate

1,793

2,625

832

46%

5

West Berkshire

1,547

2,297

750

48%

6

Wirral

6,133

6,870

738

12%

7

Aylesbury Vale

2,537

3,274

737

29%

8

Wealden

1,651

2,382

731

44%

9

South Kesteven

1,285

2,015

730

57%

10

South Cambridgeshire

2,828

3,558

729

26%

11

Solihull

3,844

4,565

721

19%

12

Huntingdonshire

1,851

2,545

693

37%

13

East Hertfordshire

1,926

2,614

688

36%

14

Powys

1,503

2,189

685

46%

15

Milton Keynes

3,864

4,546

682

18%

16

Horsham

1,406

2,081

675

48%

17

St Albans

2,571

3,240

670

26%

18

South Somerset

1,481

2,150

668

45%

19

Conwy

1,127

1,787

660

59%

20

Warwick

8,837

9,497

660

7%

LV=

LV= is a registered trademark of Liverpool Victoria Friendly Society Limited (LVFS) and a trading style of the Liverpool Victoria group of companies.

LV= employs around 4,500 people, serves over four million customers and members, and manages around £8.0bn (as at 31 December 2010) on their behalf, via LV= Asset Management (LVAM). We are also the UK's largest friendly society and a leading mutual financial services provider. www.LVAM.co.uk.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF. www.LV.com.


[1] Figures based on a survey of more than 1,000 students and parents of students.
[2] According to LV=’s Cost of a Child report 2011, 8% of parents that had hoped their child would go to university now doubt that will be possible as they won’t be able to afford it.