Hundreds of small investors are to take a stake in Newcastle’s student accommodation boom after a crowdfunding project helped raise almost £3m.

Property Partner - which describes itself as “the world’s first property stock exchange” - allows people to invest in property deals with smaller sums than are normally required in what is a multimillion-pound investment.

The company attracted 1,346 to invest in a deal to buy a block of luxury student flats on Newcastle’s Pitt Street, with £2.99m being raised towards an overall purchase price of £5.36m. The rest of the money came through a mortgage.

The purchase - which will give each bed in the 65 unit building a value of nearly £82,500 - gained interest from investors because of the site’s location close to both Newcastle University and Northumbria University. The average investment was £2,223.

Daniel Gandesha, CEO and founder of Property Partner said: “To have achieved the UK’s largest ever property crowdfund is a proud moment for us, and a pivotal moment in the property investment space.

“It is no surprise that purpose-built student accommodation is what has driven this interest given its strong performance in recent years, and being an asset class that traditional landlords have long been locked out of.

“But it’s not only great for investors. Students no longer view run down student digs as part and parcel of their university experience. Expectations are changing as more and more purpose-built blocks offer students modern and attractive accommodation at the heart of their university towns.

“Today’s news marks another step in our journey to build a property market that works for everyone.”

Student property is increasingly being seen as one of the most lucrative areas for property developers, with dozens of new blocks being built in university citie s like Newcastle, and the units delivering higher rents than housing or commercial property developments.

Investors who have bought part of the Newcastle block can gain a share of the rent or sell their holdings or Property Partner’s secondary market.

While the crowdfunding raised £3m towards the purchase of the property, the remaining £2.4m was mortgaged through a major high street bank.

The five-storey property has a gross rental revenue of £362,525, and will lead to a total of £187,231 being paid to investors each year.