There are a great many reasons why our buy to let insurance customers choose to invest in a property with a view to renting it out. ‘To pay for our child’s university accommodation costs’ is increasingly one of them.
According to property site Zoopla, it is cheaper to buy than to rent in 84% of the UK’s biggest towns and cities – namely because mortgage interest rates have dropped to an all-time low, and property prices have come down noticeably as well.
In such a climate, many parents with a son or daughter about to go to university are considering buying a property with a view to letting their child live in it and renting out any other rooms to fellow students. Such a situation should see their mortgage repayments offset by any rental income, and by any profit made in the sale of the property, once the son or daughter has completed their education.
In student cities such as Canterbury, for example, with 3 universities, accommodation is at a premium. Renting in this city can cost between £400 and £500 per month. If parents are in a favourable financial position with enough to cover the deposit, mortgage repayments might be significantly lower than this. Little wonder, then, that buying is such an attractive solution to high student rental costs, which would offer no return at all.