The best places to profit from high demand for student digs

After a hellish year of missed rent, landlords and property investors can take advantage of surging demand among students for homes near university.

Revenue from student lets dropped 30pc last year, but there is now a shortage of accommodation in some university towns. Students have become confident in a return to normal life for the start of the next academic year.

Postcodes near the University of Chichester, in West Sussex, had the highest level of demand, according to UniHomes, a student accommodation company. Here, 94pc of student accommodation listed in the area have lets already agreed. Student lets in Chichester average £1,016 a month per property.

Almost all student accommodation near the University of York has also been snapped up, with 89pc of lets agreed for the coming academic year at an average monthly rent of £1,208.

The average price of a terrace house near the university in York is more than £240,000 and the average flat more than £ 164,000, according to property website Rightmove. Student landlords in the YO10 postcode could expect to bring in yields of 6pc and 8.8pc on these types of properties.

Properties close to Harper Adams University, based near Newport in Shropshire, are some of the most sought-after student lets in the country. With average monthly rents of £ 959, three quarters of the student rentals in the area have already been

Student lets in Chichester charge an average of £1,016 a month per property agreed. The average price of a terrace property in the TF10 postcode, close to the university, is more than £200,000, with a yield potential of 5.7pc.

Student lets with postcodes close to Queen Margaret University in Edinburgh and Durham University are also in high demand, with more than half the rentals listed already agreed.

Mark Hayward of Propertymark, a trade body, said student landlords were enjoying “very good capital growth” in cities such as Durham, York, Edinburgh and also Exeter, where the average rental price is £1,071.

It is not just the location but the type of property that could make for a successful investment. Mr Hayward said there was a shortage of larger rental homes, as students moved away from flats and towards houses with outdoor space, putting them in competition with working renters and families.

Phil Greaves, of UniHomes, said student priorities had shifted in the last year, and so had their accommodation checklists: “Where students traditionally may have settled for cheaper or smaller accommodation, the focus in recent months has been very much on finding a home which they aspire to spend a greater proportion of their time while studying.” Rachel Mortimer