On the third of April 2014 Universities and Science Minister David Willetts gave a speech to the Universities UK (UUK) conference in London about the economic impact that Universities have on the economy and their immediate local area. In the speech Willetts pointed out that the UK higher education (HE) sector contributed an output of over £73 billion and more than 750,000 full-time jobs in 2011 to 2012. This equates to 2.8% of gross domestic product (GDP) - up from 2.3% in 2007 to 2008.
Four years later and the impact that Universities are able to have to their immediate surroundings has only increased, fuelling strong economic growth all across the country but none more noticeable than across the North of England where Manchester, Liverpool and Leeds are reaping the rewards from world class educational facilities. Each has their own specialist areas but in a wider role the institutions are providing opportunity, education, empowerment and research to areas which had previously struggled for a foothold in an economy dominated by the south.
TheCompleteUniversityGuide recently released their latest league table for 2017 ranking all UK universities in a number of areas such as entry standards, student satisfaction, graduate prospects and degree completion. Of the three big cities currently slugging it out with the rest of the country as part of the new ‘Northern Powerhouse’ strategy all of their universities performed well with Leeds coming out top at 16th, up 3 places from last year. Manchester came next at 25th, up 2 places from 2016 and Liverpool made a strong showing in 38th climbing one place since last year.
Strong performances from the local institutions reflect strong economic growth across the region as well as outstanding results from the Northern property investment sector. It’s no pleasant coincidence that the three areas are intertwined as well regarded universities produce an innovative and dedicated labour market in to their local areas. It is a picture of universities bringing in big revenues by working flexibly with business and the outside world. In 2012 to 2013 they earned £1.2 billion from business research contracts - up on the year before. But relationships now stretch well beyond this. Universities earned another £1.5 billion from a wide range of services ranging from consultancy and CPD courses to regeneration programmes and the use of equipment and facilities. Again this is up on the previous year. In total the survey finds that UK universities earned an impressive £3.6 billion in 2012 to 2013 from business and community activities.
As students graduate from these institutions they will then begin a career path and settle in their respective cities which in return drive up wages and net wealth in the area. Young professionals with good disposable incomes increase demand for luxury and boutique living accommodation which in turn brings a healthy rental market and increased construction.
With Manchester, Leeds and Liverpool universities all appearing in the top 160 universities in the world it’s no surprise their alumni are having positive effects on the economy. Each university belongs to a local cluster of other universities and colleges which in turn helps to promote innovation within their areas.
As all three cities continue a positive and upward trajectory it spells good news for investors located in the north. The economy continues to grow and property prices continue to increase as a well-educated, cash rich and young population seek better living accommodation across their cities. As Universities go from strength to strength so too do investment opportunities in luxury property developments and student accommodation, both of which are providing strong returns in Manchester, Leeds and Liverpool.