Investment into the country’s student housing market hit £3.98 billion in the first half 2015, well ahead of the £2.35 billion recorded for the whole of last year, says property consultancy CBRE.

Within that total, London has witnessed a record £1.98 billion of transactions across the first half of the year. 

These numbers come, says CBRE, as many investors begin to see the student accommodation market as a higher yielding way of gaining exposure to London’s private rental sector, with yields at an attractive margin above conventional residential stock.

The record inflows seen in London have caused the fastest change in student housing yields in the whole of the UK, with yields now at 4.75 per cent on a par with the previous peak in 2007.

“Student housing supply remains constrained across the UK, as a growing number of students chase a severely limited stock of purpose-built accommodation in most university towns. So long as demand outstrips supply, upward pressure on both rents and capital values will continue to make the market an attractive proposition for investors” says Jo Winchester, CBRE’s head of student housing. 

“We don’t expect the market to come off the boil for some time. Some investors see student housing as a more cost effective way of gaining access to the PRS, both in terms of higher yields and lower capital values per square foot.”