buy for uni mortgages

LBrooks

We've been reading about the Buy for Uni mortgages offered by the Bath and Loughborough Building Societies. They might suit wealthier families than ours, but we do have savings to help our 18 yr old at Sheffield Uni who has 3 more years at Uni after this year. They sound risky, but might offer us a way to get one of our children into a place of their own. Our other children are older but live at home. Has anyone any experience of these?

silvercar

We thought of this but then decided that our offspring were not ready to be responsible landlords at the age of 19!

For tax reasons it is best put in their names to avoid the extra SDLT charge and future capital gains on selling.

As an ex Sheffield student, I would say concentrate on the partly student areas like Tapton or Eccleshall rather than the totally student land like Broomhill, but my opinion may be 30 years out of date.

ACG

Funny, I was sat with Loughbourough last week and discussed this with them.

Their product is pretty flexible by all accounts, you do not need a deposit as such, if you are a homeowner with equity they can put a charge on your house until the equity is in the uni property. It looks like a good product, I quite like Loughborough, we have used them twice this year on complex cases (only found out about them in July/August time) and they have been really easy to work with.

No experience with Bath.

LBrooks

Thanks for swift replies!
I think this one of our offspring would be up to the responsibility with a bit of support, and we are not too far away. Realise there might be expenses e.g.insurance, maintenance and buying big things, e.g. white goods. A lot would depend on if we could find the right kind of house for the right price in the right area. And the sums adding up!
Don't like the idea of using the family house as a guarantee. Loughborough suggest you could deposit cash in an account with them instead.
Don't know Sheffield that well though, so grateful for advice on where to look.

ACG

I think (could be wrong) the charge is only for a set amount, ie if the student house is £100,000 then it would be £20,000 (20%) so it is not a case of if your son stops paying completely they can come after your full house, but I see your point.

It might (again, I could be wrong) possible to do a combination of the 3. From the conversation I was having it seems possible.

trex227

Have you looked into the market in Sheffield? I went Sheffield Uni (granted it was 15 years ago) and my parents did look into buying a house. Houses we viewed for £100k would have bidding wars there were so many buyers and end up selling for £135k. A post a few weeks ago from someone looking to buy in Sheffield seemed to indicate it’s still the same (although obviously prices are higher!).

LBrooks

Thanks again for further comments. Am now busy researching areas and house prices to see if it is feasible...

dimbo61

As a student landlord you really need to lots of research on the whole Student Landlord, C4 use and finding the right property.
Are you looking for a 1/2 bed flat or a big house to rent out to 3/4/5 students.
HMO licence and standards.
How many new luxury tower blocks are being built or having planning permission in Sheffield ?
What is the council policy on student houses
It's a total minefield and what will you do with the property in 4/5 years time

silvercar

It's a total minefield and what will you do with the property in 4/5 years time

That's why I was suggesting not buying in a totally student area. If the landscape changes so it is really undesirable for student parents or landlords to buy (legislation or tax changes etc) you don't want to be selling in an area that is only attractive to landlords.

LBrooks

Hi, Thanks for comments.

As a young adult with partner in a small house I had lodgers, but only one at a time. I have also been a second lodger in a house. I assumed if it is your home and main residence a lodger or a couple of lodgers would not affect tax. Am now confused about whether there is local variation in the way the C4 classification works. Will do some research.

I was imagining a small terraced house or similar (like the first one I bought). Flats sound more complicated- and I think the Loughborough rules seem to imply 2 or 3 bedrooms, therefore 1 or 2 lodgers maximum. Will contact them and ask.

I can see that from a social point of view, to improve community cohesion, areas are best with a good mix of households, and an area can suffer when there are too many student properties. I am imagining that there could be an awkward time when there has to be a decision about whether to continue living there (with or without a lodger) after uni while working (hopefully), or sell it, or become a landlord with a buy to let, maybe for a year or two before selling...I think we would only do it if the house was somewhere you could imagine living in for several years.