20th February 2015
Nearly one in five parents are hoping to buy a property for their student children to give them a nice place to live.
Research by insurer Direct Line shows around 280,000 parents of teenagers are hoping to buy a property for their children to live in when they go to university.
Of parents willing or able to do this, 40% said it was to provide a safe and stable place for their children to live in but a quarter are also hoping to achieve a regular income from the property, and 17% want capital returns.
The high level of tuition fees and the increasing cost of living means parents are looking to generate alternative forms of income in order to support their children through their studies. A total of 17% of parents believe it will also reduce the cost burden for their children by saving them money in rent.
A quarter of university students are living in a property owned by their themselves, family or friends.
Jazz Gakhal, director of Direct Line for Business, 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.
‘However, the ownership arrangement of the property needs to be made clear form the outset. Parents should remember that if their child is letting out rooms to friends, it is the parent that will become the landlord. Parents who believe they may be in this situation should first check with their mortgage provider to see if this is allowed. They should then educate themselves on the regulations and liabilities surrounding student lettings.’
Gakhal added that parents should also consider landlord insurance as home insurance will not be sufficiently tailored to the needs they may have.
‘Home insurance may not provide you with the appropriate cover for injury to tenants, damage to other properties or cover for loss of rent resulting from fires, storms, and floods,’ she said.