This improvement reflects high demand for Lancaster's undergraduate and graduate courses as well as its strong business model and financial performance. 

The agency said: “In our view, Lancaster University benefits from strong, and still strengthening, student demand levels, underpinned by its high academic standing and robust financial performance and management.

“We believe that Lancaster's strong business model and its internationalisation strategy have further diversified and strengthened its financial standing.

“We are therefore raising our long-term issuer credit rating on Lancaster to 'AA' from 'AA-'.”

The report also highlighted Lancaster’s investment in new buildings and attractive campus as strong drivers of student demand.

It said: “Lancaster is one of just a handful of collegiate universities in the U.K., which in our view adds further appeal to the overall student proposition, along with its well-maintained 360-acre parkland campus.”