Rising rents and the soaring cost of living are driving more parents to buy properties near universities for their children with new analysis showing mortgage repayments can undercut local rents by hundreds of pounds a month.
Research by mortgage broker Alexander Hall compared average mortgage costs with rents across postcodes covering the UK’s top 100 universities.
It found that Sunderland is the most affordable location, with average mortgage repayments in the SR1 postcode just £275 a month – far below typical rental bills. Teesside (£361) and Aberdeen (£435) also rank among the cheapest.
The biggest savings, however, are in Glasgow. Parents buying near Glasgow Caledonian University face average monthly repayments of £806, some £535 cheaper than renting. Strathclyde (-£502), Leeds (-£488), Newcastle and Northumbria (-£484), and Cardiff (-£371) also feature high on the list of best-value university investments.
MARKET FOOTHOLD
With demand for student housing outstripping supply, parents are increasingly seeing university lets not only as a way to ease the financial pressure on their children but also as a foothold in the buy-to-let market.
Stephanie Daley, spokesperson for Alexander Hall, says: “Securing a place at university is something to be celebrated, and this September hundreds of thousands of first-time students will leave home to take that first step into the wider world.
“Not only is it an understandably daunting experience living away from home for the first time, but it’s also one that comes with a significant financial burden due to the high cost of living and renting.
“It’s for this reason that we’ve seen a growing trend of parents opting to help alleviate this strain by investing in a property for their child, and for many, this parental support is essential.”
REGULATED BUY-TO-LET
And she adds: “There are many ways parents can support adult children onto the ladder, for example through joint borrower, sole proprietor options or regulated buy to let which allow family members to live in the property or specific ‘buy for university’ products which don’t even require a deposit.
“This allows students to access housing without overstretching on rent, benefit from the lower cost of a mortgage repayment, and start building equity in a property. It’s a practical way for students to get ahead while studying and helps them take their first steps on the property ladder before they’ve even graduated.”
