A lesson in student lets.

Byline: Sarah Miloudi

THE capital's student lettings market has expanded by 11%, a report has revealed.

In stark contrast to the city's wider housing market, a study published yesterday shows that Cardiff's rentals business is thriving.

Estate agency Knight Frank revealed that over the past six years, fees for letting out homes to undergraduates have risen by 5%.

And it said that along with 10 other UK districts, the South Wales city has enjoyed a surge in its student tenancy sector since 2008.

The firm said that much of the boom in the market could be attributed to the burgeoning student population, which is expected to increase by a further 12% in the 2010/11 academic year.

According to Knight Frank, the rise in numbers will translate into an additional 5% rise in the UK student lettings market, which it hopes will help continue to boom in rentals over the coming 12 months.

CPS Homes, one of Cardiff's providers of student accommodation, said that letting out a home to a group of youngsters can give landlords a "tremendous" financial return. The agency's Andrew Dillon told the Echo: "A student let is probably the best you can get in terms of an investment, as if you have a decent property there are usually no gaps in when it is being rented out.

"The student numbers are always going up, and this means that there is huge demand.

"Students are already coming to us looking for homes for next September."

Typically, student lets in Cardiff - which sit predominately in Cathays, Roath and the Heath - are valued between pounds 250 and pounds 300 a month. But landlords earn upwards of pounds 3,000 over the same time, as most houses for undergraduates are home to five students, and on occasion, between 10 and 12 people.

Over the same period examined in yesterday's report, property prices in the capital have plunged by nearly 9%, according to Land Registry figures.

The typical Welsh house was worth pounds 146,600 in January 2009, according to the database.

But city estate agents believe that the typical property let to students is worth pounds 230,000.

Tim Goddard, of Knight Frank's student homes division, said: "The underlying market fundamentals for the student property sector are positive, with supply restricted and strong demand underpinning rental growth.

"Given the lack of finance currently available for development and the constrained pipeline, rents are likely to continue to rise for the foreseeable future."

CAPTION(S):

Cardiff's student rental business is thriving, according to a report