A new report by a leading lettings sector expert cautions parents who are considering entering the Buy To Let sector by purchasing a property for their student child and friends.
The report is commissioned by the TDS Charitable Foundation and written by Kate Faulkner, who runs consumer advice service Propertychecklists and consultancy Designs on Property.
She analyses the costs and benefits of a range of accommodation options available to parents of students, including buying to rent and renting bespoke student accommodation.
Faulkner warns parents not to take the decision to become a landlord lightly, highlighting the financial implications and more than 400 rules and regulations they could be subject to.
“With tuition fees for some universities topping £9,000 per year before living costs, higher education can leave graduates with average debts of £49,800, according to the Institute for Fiscal Studies” she says.
“Parents naturally want the best for their children, and often try to support them by minimising the burden of accommodation costs, but the options available to do so can be unclear. The cost of specialist student accommodation has rocketed in recent years, but the price rises do not necessarily reflect an improvement in living conditions" Faulkner continues.
“Parents who have the financial means may consider purchasing a property for at least the duration of their child’s undergraduate studies, renting out any spare bedrooms to fund the mortgage. Those who do take this option, however, need to be aware of the responsibility they are taking on.
“Not only in terms of financial and tax considerations, but would-be landlords need to understand the complex legal framework in which they are operating, if they are to rent out spare rooms legally.
“Even for those with the financial ability to purchase a property for their child to use while studying, it isn’t always the right choice. This guide aims to help equip parents with the tools to make the right decision for them and their child.”
The report is part of a 12-part series commissioned by the TDS Charitable Foundation, designed to educate and raise standards within the private rented sector.
You can read the full report here.