Should I buy a student home for my child?

The harsh reality for many young people is that, for all its joys, university life will leave them saddled with student debt for years to come. And with few spare pounds at their disposal, the housing ladder could well remain out of reach for quite some time.

There is nothing particularly new in that, although the scale of the challenge has increased in recent years. Nor is there anything new in parents looking for ways of shoring up their children’s future. And investing, in one form or another, in a student home can be a smart move. It brings in income, and it is a tangible asset for the student and/or their parents to benefit from during and after university. It also means that you avoid paying rent, including at times when the house is empty.

But being the landlord comes with responsibility; replacing faulty boilers, fixing broken appliances, redecorating as and when necessary. It also inevitably involves some financial risk.

Of course, you might decide that your son or daughter should take on that role. And it’s perfectly possible, depending on the arrangement you choose to put in place. There are various options, from joint ownership of the property with your child, to acting as guarantor, to gifting them a sum of money to enable them to buy the property. It really does pay to look into what’s available, because various pros and cons – not least those around tax – will apply.  

The big question for some parents is whether to invest in property or in paying off their child’s university fees. That’s a personal decision for you, suffice it to say that each will lend a very real helping hand. And there is always the possibility that tuition fees could be funded by an increase in the property’s value over the years.  

If you do decide that a property purchase is the way to go, our first piece of advice would be to do your homework, with the help of some trusted professionals. This is about more than just finding the right house, in the right area, for the right price. Good legal and financial advice on the technicalities - from Capital Gains Tax, Inheritance Tax and Stamp Duty, to formalising the terms of ownership – is essential. It’s key to making the decisions that will stand you and your son or daughter in the best stead for the future.

Why not contact our dedicated Conveyancing team today who will be able to run through any questions you may have before making the move!  Tel: 01264 353411, email: conveyancing@bsandi.co.uk or fill in our no obligation enquiry form and a member of our team will be in touch.