Considering buying a flat for our son's university years

Peterrr

Seeking advice from the collective wisdom of the community...
Our son is in his first year of uni in Glasgow (albeit not having yet attended a live lecture and currently studying from home). In the expectation that by the autumn life will be more 'normal', we will be needing to arrange digs for his remaining 3 years.
Rent would be around £600/month, so we're considering helping him buy a flat instead (one bed, price around £120k). He has £30k from an inheritance and we would raise the rest by remortgaging our house (LTV would still be well below 50% even with the additional borrowing). This would be passed to him as an interest free loan making him a cash buyer. I know that there would be costs at both ends (mortgage fees, conveyancing, selling fees etc.) which we would pay for, but my sums suggest it would still all be cheaper than throwing £20k away on rent.
Being in his name, there'd be no stamp duty to pay (or CGT in the happy event of a huge market boom though our forecasts are assuming no change in value). Should the market drop, we would take the hit (this is the only downside we can think of).
Plan A is to sell when he graduates, he gets his £30k back + any gains, and returns the balance (less selling costs) to us. Alternatively if he gains a Glasgow job and wants to keep the flat he could get a mortgage to pay us back our contribution.
Are there holes in this idea that I haven't thought of? Might he lose access to first time buyer rates or other facilities?
Thanks for any opinions!

K_S

Peterrr said: 

Might he lose access to first time buyer rates or other facilities?
Thanks for any opinions!

@peterrr I wouldn't worry too much about lender FTB incentives, in my experience they're rarely material.

The FTB facilities that may be worth a lot of money are all the government backed ones, those are the only ones I'd take into consideration.

Thrugelmir

Saving £20k sounds somewhat optimistic.  Given the rent projection for the 3 years is only £21,600. 

[Deleted User]

I think its a great idea ! 

Peterrr

Thrugelmir said:

Saving £20k sounds somewhat optimistic.  Given the rent projection for the 3 years is only £21,600. 

Thanks, though I didn't mention nor have any expectation to save that - we hope that we might save a few £000s

Voyager2002

Most of the really serious risks depend on your son: things like trashing the flat or allowing someone to live there who then becomes a sitting tenant. And of course if he decides he does not like the flat or the area then he is really stuck.

Perhaps the most probable downside: he graduates and gets a job in another place but in the short term cannot sell the flat. Meanwhile, he needs money for rent; for a deposit on a place to live; perhaps for a work suit and car, while his inheritance is tied up in the flat...

Peterrr

Appreciate the thoughts so far folks - happily he is very sensible, and given his inheritance money would be tied up in the flat, we have no concerns about him trashing it. Hopefully a city centre flat in walking distance of the universities and offices will always have a market, but my wife and I would assume any downside risk along with all costs for the duration (given we would otherwise be paying the rent and related costs anyway). Hopefully in 3 years we would either sell and realise a lower net spend, or our son takes it on if he wants, without paying for conveyancing. Either way he will have enjoyed his own city centre flat for the interim and may even enjoy some value appreciation.

dimbo61

Lots to consider here.
What happens if your Son hates Glasgow ?
Drops out of University after 1st or 2nd year ?
Billy No mates as he will be living on his own in the 1 bed flat.
Buying and selling costs might  mean no  profit.
If you Son needs to sell in 3 years what happens if the market has dropped and he can't sell for 2/3 years.
Become a Landlord ? Scottish rules and laws are different.
I am a Student Landlord with a large HMO in Manchester and each year a group of students live in our HMO.
Most make friends for life and my tenants are happy to be living in a house rather than halls of residence.
For his mental health let him be a student and live with a group of other students. 
Share meals and pay bills, learn to use the washing machine and cook meals 
Clean and look after a property ( I am always hopeful that will happen )
Yes it will cost money but he has some money and he needs the full student experience

BookmobileBadGirl

Part of university is meeting people and socialising, he hasn’t had that opportunity (much) in the first year. I would be worried about missing out on that by living in a one bedroom flat

clueless_but_curious

The more common route here is to buy a HMO and he effectively sources your other HMO occupants and it is somewhat self policing by virtue of his ownership.  Also stops him being billy no mates.  
Scottish law is indeed different for the purchase process (although you have not stated your domicile)
They key is his uni experience, not making/saving a couple thousand

dimbo61

No changed my mind please buy a 2 bed flat to give Son and a friend somewhere to stay rather than consider a HMO in Glasgow, Scotland.
Not sure of the licence requirements but this is one hell of an undertaking to buy the right property in the right place and get it to full HMO standards. Room size, fire safety, EICR GSC EPC PAT testing and legionnaires checks.
It's a job and requires huge investment.