The UK student housing market is now an established global market, attracting rapidly rising levels of international investment. Against a backdrop of weaker applicant numbers, investors need to focus their portfolios where student demand is most robust.

Pre-clearing applications to UK universities fell this year, though they’re still 33,000 higher than they were back in 2012. But this growth has been concentrated in the institutions where graduates can expect a higher starting salary.

Our new analysis shows universities with higher graduate starting salaries have seen greater increases in demand from prospective students. For every difference of £1,000 in average graduate salary, applications grew by an extra 1.9 per cent.

Source: Savills using HESA student survey, UCAS

This is great news for universities whose graduates earn more. Imperial College London graduates, for example, earn an average of £30,600, more than £5,000 above the UK average. Applications at Imperial have grown by 22 per cent since 2012.

Other winners include the University of Bristol where graduate salaries are £2,700 above average, and they saw a 20 per cent increase in applications since 2012; Southampton graduates earn £2,800 more than average, with applications up 26 per cent; and Royal Holloway graduates earn £1,900 more than the graduate average and applications have risen by 24 per cent.

The news is less positive for universities such as York St John, whose graduates earn £20,300 per year on average. There, applications have fallen by 9 per cent since 2012. Northampton is another university where graduates tend to earn less - £3,200 below average - and applications have dipped by 3 per cent since 2012.

Last month, research from the IFS showed that students entering university this year can expect to face over £50,000 of debt when they graduate. With such a high liability, it’s no wonder students are favouring universities with higher graduate salaries. Student housing investors, whether large scale developers or buy to let landlords, should take note and focus their portfolios accordingly.

Further information

Read more: UK Student Housing report