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A new student letting study has revealed the top 20 university cities in the UK for property investors.
London comes out top of the pile – closely followed by Kingston-upon-Thames, Brighton, Edinburgh and Oxford.
But rents outside the capital performed best – showing a 4.1% increase in 2010, while those in London slipped by 3.6%.
The strong return outside London is driven by a strong demand and under supply of accommodation, said estate agent Knight Frank in the firm’s annual student property report.
Private student landlords with houses in multiple occupation, or small student halls can take heart from the figures that were produced for larger student housing providers.
100,000 more beds needed in London alone
More good cheer was provided by the conclusion that higher student tuition fees this year might have a negative effect on university applications this year, but in the long term, the hike is not expected to stop young adults going in to higher education.
James Pullan, Knight Frank’s head of student property said: “There have been record applications for university places this year. Once again students will find there is an undersupply of student accommodation to meet their needs. The student accommodation sector is now recognised as forming a critical component of a balanced investment portfolio.
Total returns in 2010 for student accommodation in the regions performed well. Knight Frank has identified the 20 top university cities and ranked them according to investment potential.
“With 40 higher education institutions, London has the highest concentration of students in the UK, but with an undersupply of student accommodation providing value accommodation at an affordable rent. We consider London needs a further 100,000 student bedrooms.”
Besides the top 20 university locations listed in the table (below), Knight Frank considers another 46 regional locations as favourable places for investors.
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