STUDENT housing rents in London are set to rise by three per cent over the next 12 months because of the rising number students enrolling to universities and the lack of available rooms to rent in the capital.
Knight Frank said London rents – up 1.73 per cent this academic year compared with last year – were still subdued because of the recent hike in tuition fees.
However, the property consultancy expects rental growth to increase by three per cent next year because of rising student numbers driving demand for housing.
The number of British and international undergraduates is predicted to rise by three and four per cent respectively next year.
James Pullan, head of student property at Knight Frank said: “While a big step up from last year, the long-term student rent trend is between 2.5 and three per cent in London and the regions.”
Student accommodation has emerged as the best-performing asset in the UK property market and generated average total returns of 7.8 per cent in the year to September.
The sector has attracted a wide range of investors, with US investor Greystar Student Living snapping up a portfolio from the collapsed student housing owner Opal Group for £300m last month.