Higher education is an important contributor to many local economies. Nationally the sector contributes £40 billion to Gross Domestic Product, and students are a key component of population growth and housing demand in many locations. Both central and local decision makers therefore need to carefully consider the financial and housing implications of any policies relating to higher education.

We have analysed all local authorities in Great Britain and selected a subset of 76 that have a significant student population. Within this subset, we have calculated that the average contribution of higher education to local economies, as measured by gross value added (GVA), is 6% of the total.

The traditional university powerhouses of Oxford and Cambridge put their corresponding local authorities in the top two spots, with higher education contributing an estimated 21% and 17% respectively. Elsewhere in the top 10 are Canterbury (University of Kent), Ceredigion (Aberystwyth University), Lancaster (Lancaster University) and Bath and North East Somerset (University of Bath and Bath Spa University), all large universities in otherwise small local economies.

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^{Source: Savills Research}

Alongside their contribution to economic growth, students also have an impact on local population growth and the housing market. In some areas, students have been a large proportion of population growth and even counterbalanced population declines in two areas. Ceredigion is one of those areas, with its student age population growing by over 1,600 between 2001 and 2011, more than offsetting a fall of 600 residents of other ages. Dundee City (home to the University of Dundee and Abertay University) behaved similarly, with the student age population growing sufficiently to offset a fall in other age groups.

Bath and Lancaster also rank highly on this measure. Two-thirds of the population growth in Bath and North East Somerset over the 10-year period can be attributed to an increase in the student-aged population.

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^{Source: Savills Research & Rightmove}

In previous years we have shown how purpose-built student housing could help ease the housing crisis. Across Britain, the creation of more student beds could help unlock 77,000 family homes. This may not contribute much at a national level but is a substantial number for some local areas.

This analysis highlights the need for both local and national government to recognise the important contribution this sector makes to local economies and the role that purpose-built student accommodation can play in tackling the housing crisis.