An increase in foreign students and UK undergraduate applications have strengthened the outlook of accommodation provider Unite.

The group, which has 1,100 beds in Birmingham, reported a "solid performance" with trading in line with expectations in an update ahead of its interim results.

Meanwhile, it expected to benefit from an eight per cent growth in graduate applications received by clearing service UCAS, while the number of overseas applications are forecast to increase between six and nine per cent.

The company said it had been successful at letting a greater proportion of its residences for 50 to 52 weeks, rather than shorter academic year lets. Meanwhile, the group said it was on course to add an extra 4,677 new bed spaces into its portfolio for the 2005/06 academic year.

It is currently developing The Heights project near Aston University, using a modular build system, where bedrooms are made in the company's Stroud-based factory and stacked into structures up to seven stories high. It plans to use the same method at a former Castle Cement site in Eastside.

A 750-bed project in Birmingham, previously scheduled for delivery in 2006 as part of a larger urban regeneration project, will now be the subject of a wider planning judicial review.

Consequently construction work will be delayed and the project will not now be completed before summer 2007.

As a result of this, the group now expects to deliver approximately 4,250 new bed spaces for 2006 occupation.

Chief executive Nicholas Porter said: "Reservations are again strong, development activity is on track and our pipeline sees the group wellplaced to take advantage of the continued demand for quality, affordable accommodation."

Daniel Horwood, an analyst at KBC Peel Hunt, said: "Unite's trading statement affirms the case for development and ownership student accommodation assets, but demonstrates how planning obstacles can delay delivery."