Buying a house for student son, what is the best way to do it?

Kynthia

If you put the property in your children's names then they won't qualify as first time buyers in the future. That isn't necessarily a problem but you should be aware of it.

As your children aren't a married couple they don't have to split any rental income between them 50:50. Therefore they could declare that all the income goes to your son and your daughter wouldn't need to declare anything.

I believe the 'rent a room' scheme only applies if you are a resident landlord with one lodger. However if you are a resident landlord with more than one lodger you can declare the income and offset it with allowable expenses which is similar to how a non-resident landlord would deal with their propety income.

anselld

Kynthia wrote: »

I believe the 'rent a room' scheme only applies if you are a resident landlord with one lodger. However if you are a resident landlord with more than one lodger you can declare the income and offset it with allowable expenses which is similar to how a non-resident landlord would deal with their propety income.

AFAIK you can still claim RAR with 2+ lodgers but it is capped at £4250

V_Chic_Chick

If the property was in your son's name, then the other students would be classed as lodgers and (as I understand it) you would have very little protection if they just decided to up sticks, move out and stop paying rent mid-way through the academic year. Even if you wrote 'AST' at the top of the contract, then they would still be lodgers in the eyes of the law. If you called a dog a cat, then it would still be a dog!

In addition, some student towns are already quite over-supplied with student housing - there are student houses in Manchester that never find tenants, leaving landlords with a year-long void - despite the fact that Manchester has the largest student population outside London. On the other hand, Aberystwyth has a notorious shortage of student housing, and many students end up commuting from other, nearby towns!

In addition, you'll have to consider whether - even if your son is willing - his friends will actually want to live there. The may have a larger group that they want to live with, there may be better properties out there, better locations (especially once placements are taken into account), the rent may be more than their budget, especially once bills are taken into account . . . you get the idea. There's no guarantee that your son's friends will accept accommodation that they don't particularly like / can't afford just because your son is the landlord.

Have a look at this for what happens when house shares where someone's parents are the landlords goes pear shaped https://forums.moneysavingexpert.com/discussion/4236465

Don't forget that you will have to get gas safety certificates, and there's the possibility of having to get an HMO licence.

Would a better option be buying a rental property on the presumption that you will rent it out to other students, using the income to offset your son's rent, but give your son the option to live there if he so wishes?