Edinburgh tops student accommodation investment tables

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by Gill Montia

Estate agent, Knight Frank, has published its latest Bricks & Mortarboard Student Accommodation Review, in which it reveals that for investors, student accommodation is now more profitable than residential, industrial and retail property.

The report states that between 2003 and 2007, a student’s average weekly rent rose from £67 to £82 and the property consultant expects a similar level of inflation (5.2% average annual) through to at least 2011.

Around one in ten students are accommodated in private halls of residence while the remainder rent rooms with costs ranging from £40 a week in Hull to £150 a week in central London.

According to the report, student accommodation has seen total annualised returns of 10.2% over five years and Knight Frank says it expects student property to continue to be more profitable than other property investment sectors for the next three years.

It ranks Edinburgh as the best investment location for student residences because the city has relatively few institutional and private hall bed spaces.

Second place is taken by London, followed by Newcastle, Birmingham and Manchester.

Total student numbers in the UK have risen by 39% of the past decade, to around 2.5 million, and are expected to continue to rise by an average of 2.9% per annum over the next decade.