Mortgage Express, the specialist lending arm of Bradford and Bingley Group, has said that instead of paying rent for university halls of residence or privately-owned student houses, parents could consider buying a property instead.
According to Mortgage Express, a different approach to student accommodation can yield savings of over £4,500 per year. Using Birmingham as an example, where a three bedroom house averages £94,000, an 80% LTV buy-to-let mortgage from Mortgage Express would be £5,264 per annum, while the average rental for this type of property would be £6,580. The bonus would be that the children could pay little or nothing, with the other two occupants paying the bulk of the monthly payments.
Roger Hillier, Mortgage Express product development manager, said: ‘This is a significant niche market and is growing as the number of students increases every year. Where possible it makes sense to invest in a property this way because the venture can finance itself. Individuals can also make a profit ‘ and this is welcome at a time when the cost of being a full-time student is soaring.’