Jonathan Fewster, partner at Bircham Dyson Bell LLP, believes that student accommodation schemes are where investors are turning their attention because they can be underpinned by nomination agreements from the Universities, placing the risk on the institution not the investor.

"Even the high street lenders are lending on student accommodation schemes backed by a nomination agreement," explains Jonathan Fewster.

"Where the university takes the risk its easy to see why both investors and high street lenders would be happy to invest - it's a reliable covenant; the agreements can be for 25 years and guarantee rental for beds regardless of fluctuation in demand."

With the advent of university fees, one might have thought that demand for student accommodation would wane, but in fact the opposite is expected as students finance the consolidated cost of tuition fees, rent and living expenses.

"There doesn't appear to be any let up in demand for accommodation - and therefore student housing schemes are still popular," explains Jonathan Fewster.

"Via work completed recently for a client, we've witnessed a competitive market for development - one client having purchased a £38 million student scheme in central London - and immediately renting a third of the empty student 'units' that were surplus to their own requirements".

"On the planning side, local authorities often see student accommodation as attractive because it brings a vibrant community to what may be a redundant site.

"Historically student accommodation has not triggered a requirement for planning gain by way of affordable housing although we've recently seen the trend reversed in Southwark, which has imposed an affordable housing requirement on a recent scheme.

"If this trend continues then it will be an additional consideration for the student housing market but there's still a very strong demand particularly in London where there are increased applications from foreign students with greater spending power."