Edinburgh has been named the best spot for UK residential landlords to invest in student accommodation according to a recent review.

Knight and Frank’s Bricks & Mortarboard Student Accommodation Review ranked Edinburgh above other parts of the UK including the whole of London, Newcastle, Birmingham and Manchester.

Drew Oswald, managing partner at Knight Frank Scotland, said: “As one of the UK’s biggest university cities, it’s no surprise that Edinburgh scored top marks in the review. Edinburgh has fared well due to a continuing demand for student accommodation in the city. The opportunity to create high-density developments and lower unit costs mean that the provision of student accommodation is an attractive investment opportunity.

“Combined with a good product and a lower risk profile, the student accommodation sector is attracting more and more informed investors and developers to Scottish cities such as Edinburgh.”

The student accommodation sector presents an attractive alternative opportunity for investors, especially with student accommodation predicted to outperform most other property sub-sectors over the next three years, with predicted annual total returns of 12 per cent.

These encouraging figures came as a result of a predicted rise in total student numbers and rental levels in privately operated halls – where student population could go up 2.9 per cent per annum and rents by 4.5 per cent per annum.

Average weekly rents for student accommodation increased to £82 in 2006/07, up from £67 in 2003/04, and represented an average annual increase of 5.2 per cent.

The Knight Frank Student Accommodation Investment Index was launched in locations with more than 20,000 full time students, and of the 24 UK locations which held high potential growth showed that in addition to the London markets, Edinburgh offered one of the strongest opportunities for prospective investors.