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With record numbers of students going to UK universities with high expectations about their careers, and their accommodation, it could be wise to target this sector as potential tenants. Students are no longer expected to live in dingy bedsits or overcrowded houses. They expect all the comforts of home or a hotel, with high-speed wifi and all mod-cons. This is particularly true of the large number of students coming from overseas.

However, the severe housing shortage across the UK is also hitting this sector, which is why student rents have risen by as much as 10 per cent in the past year. In towns and cities with high tenant demand such as Oxford, Cambridge, Surrey and Edinburgh, prices are being pushed up. In some areas, it is thought that there are about five students competing for every available room. London, as usual, is a special case because of the extremely high demand for rental properties. The capital is also home to a number of large universities and colleges, which puts even more pressure on the demand for accommodation. Professionals are also looking for rooms and research by shows about one in three rooms to rent in the top university towns and cities are simply not available to students.

Students are also unlikely to factor in rental prices or the lack of accommodation when choosing where to study, but it could pay dividends if they did. For example, they could save more than £7,000 in rent if they went to Durham instead of Oxford, or an astonishing £792 a month if they picked St Andrew’s in Scotland instead of a central London university. However, London rentals do not necessarily bring in the best yields because of the high purchase price of properties, so it pays to research different locations to see where demand is high and the yields are good too.

Investment in luxury student accommodation blocks is worth investigating, as these rooms are very popular. One block at Cardiff University has its own cocktail bar, cinema, games room and courtyard, and is more in keeping with a quality hotel than student digs. Rents are between £175 and £265 a week at Windsor House, which includes free wifi. London also has its fair share of luxurious student digs, but the price is much heftier. Flats costing from £270 a week will get you a cinema and a gym but there are also much swankier accommodation blocks for £1,700 a month. Investing in blocks such as these could pay dividends, if under-graduates continue to demand quality living.