The supply of modern, purpose built student accommodation in London has expanded significantly in the past few years yet there remains a significant undersupply in a number of areas according to Drivers Jonas Deloitte. As a result, despite the number of purpose built bed spaces rising, the sector has been able to demonstrate a steady increase in average weekly rents throughout the recent recessionary period.

Chris Baldwin, head of student accommodation at Drivers Jonas Deloitte, commenting on the firms latest research said: "This year, findings from our latest research show that this robust rental trend remains very much intact. Average weekly rents for purpose built student accommodation across Greater London have risen from £146 to £158 per week - a rise of over eight per cent. For direct-let accommodation however, rents are higher still: average weekly rents for direct let cluster rooms in zones 1 and 2 have risen to £200 per week, whilst for direct-let studios the figure has reached £282 per week.

"Nevertheless, some questions remain as to the sustainability of these rents in future years. One reason for caution is the introduction of higher student fees from the next academic year onwards. Albeit a good deal of this impact could be mitigated by the fact that a significant proportion of students in London are from overseas, and they already pay higher tuition fees - as well as the simple reason that the quality of universities in London will remain an important draw even with higher fees.

"A second reason for caution concerns the 2012 Olympics. With operators keen to benefit from the rise in demand for accommodation during the Olympic period, a number have shortened student tenancies by two or three weeks during this academic year, and some appear to have increased average weekly rental rates to compensate. Longer tenancies are likely to resume the following year, potentially reversing this effect. "