Student accommodation in the regions of England and Wales outperformed all other property asset classes in the year to December 2010, according to Knight Frank, with total returns (income and capital values) of 14.65%, against London’s 8.41%.

The company report that the strong performance of the regions is being driven by the imbalance in supply and demand. The Knight Frank Student Property Report Spring 2011 points to Kingston, Brighton, Edinburgh and Durham as the top ten locations to invest in student property.

Knight Frank also expects that universities will begin to market accommodation stock to the private sector, raising in the region of £500m over the next five years.

James Pullan, Knight Frank’s head of student property commented : “There have been record applications for University places this year. Once again students will find there is an undersupply of student accommodation to meet their needs. The student accommodation sector is now recognised as forming a critical component of a balanced investment portfolio.

“Knight Frank has identified the 20 top University cities and ranked them according to investment potential. With 40 higher education institutions, London has the highest concentration of students in the UK, but a structural undersupply of student accommodation providing value accommodation at an affordable rent. We consider London needs a further 100,000 student bedrooms.”