Student letting returned a much higher degree of success than other forms of property investment over the past year.

Returns are running at a massive 13.5% on average for student landlords despite a small fall in yields that were hit by a fall in London rents.

The buoyant results for student landlords showed were revealed in the latest annual student survey from London Estate agents Knight Frank.

The survey for the year ending September 30, 2010 showed:

• Average rents rose 2.2%

• London rents fell by 3.6% while student rents for regional cities were up 4.1%

• Yields stand at 6.00% in London and 6.50% elsewhere

• Total returns (income and capital value growth) are an average 13.5%

James Pullan, Knight Frank’s head of student property said: “Student property has delivered consistently healthy returns over the past five years. The sector avoided the crash in both capital values and rentals seen in the wider commercial and residential sectors in 2008 and early 2009.[[

“Rents have continued to rise into the 2010/11 academic year, reflecting the strong demand for accommodation from a rising student population, but also the ongoing process of improvement and enhancement being undertaken by the student accommodation operators.“

“Full occupancy is a characteristic of the sector.  In the regions outside London, rents have risen by around 4.1% over the last academic year. In London, we have observed some pressure on the high end stock which has resulted in an overall fall of rents this year.”

Knight Frank predicts student rents will keep increasing because of a shortgage of suitable property.