THE STREET in which Jane Stubbs lives is the traditional type where the gardens have always been kept nice and the neighbours look out for each other.

When she bought her house, a small, Victorian terrace, in 1997 it cost £41,000. Today she could sell it for nearly triple that amount, a payday that would have most homeowners cheering all the way to the bank.

But Stubbs is not celebrating, and she and many of her neighbours would be happier if the words “little goldmine” did not apply to their homes.

In a country where the favourite obsession is property prices, this might seem remarkable. But for the past few years the people of her community have experienced a phenomenon which subverts all logic.

That is, the more dilapidated the area becomes, and the more overflowing binbags are dumped in the street and graffiti is scrawled on the walls, the quicker house prices shoot up. This has nothing to do with property developments or the fact that the area is within spitting distance of Headingley Cricket Ground in Leeds. The reason is students. Or, to be more accurate, student accommodation. And the claim this week that Tony and Cherie Blair have bought a £250,000 flat in Bristol for their son Euan while he studies at university will only add grist to their mill.

British universities have enjoyed booming business over the past decade. Thirty years ago 12 per cent of under-30s went into higher education; that figure now stands at 41 per cent. The Government intends to raise it still further to 50 per cent by 2010, a strategy that will bring many obvious benefits to the country.

But all these extra students have to live somewhere, and the cities to which they are flocking must accommodate them. This is where the landlords come in. They spotted this potential bonanza years ago and have been quick to snap up houses, often block-buying them in popular areas and paying way over the market rate.

Student houses, of course, do not normally fall into the category of “desirable properties”. Images of Rik Mayall’s squalid dump in The Young Ones are more familiar. But this is not about premium buildings, it is about premium sites. Students are sheep-like; they want to live where there are other students. So houses in popular zones, no matter how rundown, become gigantic cash cows.

Landlords routinely squeeze eight students into a terrace designed as a standard family home, then sit back and watch the money roll in. Meanwhile, neighbouring families, unable to stand the noise, litter and general deterioration of the area, sell up — usually to another landlord. And so the takeover goes on.

Stroll around Headingley and the effect is painfully visible. “To Let” signs hang from every third house. Mattresses and old cookers pile up in back gardens. Corner shops and newsagents have closed and re-opened as takeaways. The local economy is erratic, booming in term-time and deathly during vacations. Some 75 per cent of people who live in this two-and-a-half-square-mile area are students.

More worryingly, say locals, the area has become a favourite with burglars who know that, due to multi-occupancy, most houses contain several TVs, computers and hi-fis. Headingley, where one in ten houses is burgled each year, is now one of Britain’s biggest crime blackspots. But the problem is not confined to Leeds. Experts predict that most university towns will be affected if better accommodation strategies are not found in the next few years. They have invented a name for the syndrome — student-ification — which has been likened to the gentrification of the Sixties, when the middle classes forced the working classes out of affordable housing in poor areas of cities.

Nottingham is already experiencing the phenomenon, and Edinburgh and Southampton will not be far behind. Dr Darren Smith, of Brighton University’s school of the environment, who is studying the urban changes caused by students, says it often causes tension in the community. Campaigners are urging the Government to pass legislation to redefine houses of multiple occupation (HMOs) and limit their numbers in a single area.

The people of Headingley and nearby Birley, one of the most highly populated student areas in Britain, know this syndrome all too well. At the last count the city played host to more than 36,000 students, the majority of whom attend Leeds University and Leeds Metropolitan University. Twenty years ago there were eight letting companies in Headingley. Now there are 40.