A twist to the usual narrative about how hard it is to be a student these days (£9000 a year fees, student loans, massive debts) and even harder to get a foot on the property ladder for young people (huge deposit requirements, impossibility of saving, rising rents) has come to our attention.
Whilst most students are scrabbling down the back of the sofa for a couple of quid to buy a kebab, there is a new opportunity for the canny and organised ones amongst their numbers to kill a few birds with one stone, with zero outlay. Those birds include solving their current housing dilemma at the same time as becoming a homeowner.
A new scheme announced by Property118.com, a popular community for landlords and property professionals, gives students the option to invest in their own student house. The deal involves offering a mortgage of up to 100% on a property up to £250 000 in value, with no deposit necessary. On loans above 80% LTV, a collateral charge on the student’s parental home will be required by the lender.
We could see students buying their own two or three bed flat or house, and renting out the spare rooms to their fellow students. They’d become live in landlords, and so may also benefit from tax free rent collection up to the amount of £4250 a year, under the Rent a Room scheme.
Interested students and their parents should inform themselves fully of the possible implications of investing in a student property before committing. Studying away from home is a short term commitment, as opposed to a twenty-five year mortgage, and students need to think carefully about what happens once they finish their studies.
For more information visit Property118.com.