In the third quarter of 2013, the research from The Business Mortgage Company (TBMC), found the average rental yield from student tenants was 7.5%, compared to a 6.06% average overall. It noted average yields for the large terraced houses typical of student areas were also strong, at 7.87%.

However, only 2% of applications processed by TBMC were for properties rented out to students.

TBMC chief executive Andy Young said the student segment of the private rented sector offered an excellent opportunity for landlords: “The demand for student accommodation is likely to remain strong with the number of people currently entering higher education.”

The index found interest rates remained low for buy-to-let mortgages, despite predictions earlier in the year that the spring rise in swap rates could push fixed rates upward.