Almost one in five parents say they plan to buy a property for their offspring to live in while at university, a survey has revealed.
A report found that parents want to buy a home for their student children in a bid to provide them with a more stable and secure place to live, as well as creating a solid investment for themselves.
The trend had waned in recent years, property experts have claimed, as declining housing prices in the post-recession years made buy-to-let properties an unattractive proposition.
But now, rising property prices are attracting parents back to the market, with around 280,000 parents of teenagers – 17 per cent – claiming they are hoping to purchase a property for their child to live in whilst at university.
Parents are also hoping such a buy would help their student offspring with their finances by taking away the spiralling cost of student housing – as well as using the purchase as an investment for themselves. A quarter are hoping for regular income from the property, from rent paid by flatmates of their children and one in six is hoping for capital returns. More than a quarter of students say they currently live in a property owned by their own parents or other family or friends.
Jazz Gakhal, director of Direct Line for Business, which carried out the survey, said: “It’s great to see that parents are seeing opportunities to help their children get a first step on to the property ladder and create additional income through buying a property for their university bound children.
“Parents should remember that if their child is letting out rooms to friends, it is the parent that will become the landlord. They should then educate themselves on the regulations and liabilities surrounding student lettings.”
Mark Hordern, chairman of Solicitors Property Centres Scotland, said the recent improvement in the property market had encouraged more parents to consider buying a flat for their student children.
“This was quite popular a few years ago,” he said. “But post- recession, there came a risk of capital loss rather than gain, which will have put people off. Now, people have more confidence that there will be a capital gain and when parents look at the cost of renting for four years, this looks like an attractive proposition, particularly if they can rent spare bedrooms out to friends which could cover the mortgage costs.”
He said that while cities such as Glasgow – with a high student population and relatively low property prices – were attractive options for parents, pricier towns such as Edinburgh and St Andrews also remained popular.
“To wealthier parents who can afford a property in these places, a pricey town is seen as a good option as it is already a good area and therefore a good buy in many people’s eyes,” he said.
However, Gordon Maloney, president of the National Union of Students (NUS) Scotland, said that many students were struggling to pay for somewhere to live while they complete their courses, due to the spiralling cost of student housing – especially in expensive cities such as Aberdeen and Edinburgh.
He said: “With rents continuing to grow and grow, it’s becoming increasingly difficult for students to find affordable, safe and quality accommodation in Scotland. While there will be a lucky few whose parents can afford to purchase properties in these cities, the reality is the overwhelming majority of students will struggle to find quality housing that is both affordable and safe.”
‘It was a great starting point to the property ladder’
REBECCA Christensen was given a flat deposit by her parents when she was in her second year at Glasgow University and has since used it as a basis to move up the property ladder.
“They looked at how much it would cost to pay my rent for a year and how much a small deposit on a cheap flat would be and decided it would save them money, so we bought a place in the West End,” said Ms Christensen, who now runs independent online gift retailer Love from Indie Street in Edinburgh.
“It was much nicer to have my own flat. I’ve since rented a few times, when I’ve moved to a new city and have had to deal with a lot of dodgy landlords, so having my own flat was much better. I rented the other rooms out to friends to cover the mortgage.
“It was a great starting point for me in terms of being on the property ladder. I have since sold it and bought other flats.”