Student Mortgage

jimjames

I'd agree it's not a great idea especially with only £10k. It was something I looked into when I was at uni but buying with friends, fortunately I didn't go ahead as the property market crashed shortly afterwards and we'd have been in negative equity for a long time afterwards. It seems to be forgotten that property prices can go down as well as up so there's no guarantee you'd be able to sell to cover your costs or even get your deposit back. With the current financial situation I think that's a more likely outcome than it has been for many years.

123imp

mjdrae said:

dimbo61 said:

This is a poor idea.
What happens if after one year at Uni your daughter wants to leave.
Buying and selling costs could well cost way more than any increase in value over 3 years.
Most students start in halls and meet friends for life.
Mental health, being a Landlord at 18.
Getting her friend/s to pay the rent each month.
Rules and regs about renting even with a lodger.
If she had £100,000 and you were mortgage free and maybe looking for a 2 bed city centre apartment the sums might work.
Let your daughter enjoy being a student and live the student life.

So, my 18yr old.. whose head is screwed on and wants to make something of her life is thinking about investing in proprty and getting on the ladder instead of blowing it on a car or holidays and its a poor idea....  wow.....

And who said anything about 'getting her friends' to pay the rent..... 

Bet you're a barrel of laughs on a night out.

I think this was a very harsh response to someone who was trying to help. 

The truth is that property purchase and ownership is incredibly stressful, even when you have steady employment. The actual buying part alone is probably one of the most stressful things you'll ever do in life.

ACG

There is a lender who may allow your daughter to buy the property and rent out any other rooms, if the rent from those rooms is deemed enough to cover the mortgage than it would be enough. If not, then parents/daughters income may be used to help support the mortgage. 

Im not sure on the product specifics (deposit needed, whether the rent just needs to pay the mortgage or a bit on top) as its not something I have had to place. But it could be an option. One for a broker though I think. 

dimbo61

https://www.studenthomefromhome.co.uk

Would you rather have your daughter stay in a student home like the ones  above ?

dimbo61

PS I am a HMO student Landlord in Manchester.
Article 4 and the general attacks on Greedy Landlords by the government and Shelter + others means running a business is hard work for an experienced  Landlord.
The are hundreds of properties up for sale in Manchester and thousands of people looking to rent WHY.
You really have No idea of the problems you face in preparing a property to rent. Great idea but saving into LISA,s and enjoying uni and passing the degree would be better.
I also work for the NWAS NHS Trust 

ManekiNeko

I'll share a personal story, in case it's of use...

I went to university as a mature student, in post-2012 student loan times. For context, I have always been interested in owning property and for a very long time (c. 20 years) thought one day I'd love to be a landlord. (In recent years, the regulatory environment for landlords has changed, and I doubt I'd pursue the idea now, although life is long and who knows in the future etc.)

I was originally keen on the same idea as your daughter and thoroughly investigated student mortgage options, but in the end I gave it up as a bad idea for me personally.

When I actually got to uni, I found myself extremely busy on my undergraduate course, and this was necessary to get good grades. I was at an Oxbridge uni, but unfortunately my mental health started to worsen, while I also found I felt I was on the wrong course and that I'd made a mistake and was more interested in a different, closely related, subject. I ended up leaving and returning to work for a few years, before returning to a Russell Group uni afterwards where I actually had enough spare time to throw myself into student life. (And I was right second time, I've adored my course.)

If I'd bought at my first uni, I'd have been scuppered for attending my second one, as it was nowhere near. Also, even at my second uni, I was extremely busy - rather than studying all the time, I was rather studying hard and then also having the time to really enjoy student life - gaining experience through student societies, taking internships, attending summer schools, getting articles published, and just plain getting to know my coursemates and making friends in halls and through student clubs etc. For me, a significant amount of the value of my degree came from the extracurricular opportunities university opened up, and my time was over committed at times even living in halls. My time off was from Friday night (usually 6pm ish) until Sunday morning, when I'd awaken late and make a good coffee before getting on with my reading. So basically, I had one evening and one day off each week. On the other nights, I usually had just 1-2 hours each evening to make dinner, shower and relax. Sometimes an essay would take longer than predicted and I'd be up until 4am, get three hours sleep and get up for lectures. And this happened despite the fact I was a fully grown, proactive and motivated adult used to scheduling my day and holding down a busy, responsible job. I wasn't into clubbing, but went out with my friends to a pub, cinema or restaurant once a month on the average. Academia simply isn't something that can be tidily scheduled, and exam times were even more intense for me.

It is true that my mental and physical health impacted my ability to study, and slowed me down (but didn't impact my grades). I'm far from the only student who struggled with this, though, and most students were doing more than me - going out clubbing a couple of nights a week, and often working a lot of shifts too to make ends meet.

If I'd had a house to think about, it would have impacted my ability to fully engage in uni life, and I strongly suspect it would have impacted my grades. Even 'simple' tasks like needing to find a good plumber locally would have taken away time I didn't have, never mind whether I'd be able to be in at home at the relevant time without having to skip a lecture or miss an opportunity (and I'd never skip a lecture unless I was really ill, they're crucial).

I own a home now, and buying it was incredibly stressful and time consuming. Purchase was delayed by around three months - this would have been catastrophic had I needed it ready to live in for the start of term, as student accommodation is usually all taken (at least the good ones that don't also cost the earth) by the January before the September start of term.

When I completed, I soon discovered a lot of DIY jobs (that I was broadly aware of and thought I'd get to over the next few years) were actually urgent jobs, and dealing with them has left me short of money and time. I'm actually staying elsewhere until I can get some basics up to scratch, as I've had a lot of problems come up and it's not habitable just now - but I need to wait until I can save up to fix them. I have mental health conditions that have made this process harder on me, but I can't imagine it would be easy trying to study if, say, your boiler broke down and you needed to pick up extra shifts at work for the next few months until you could afford to fix it.

I'd also say that after my studies, I thought for 100 per cent certain I'd continue to live in the place I'd studied in. I believed this for all of my degree course, until halfway through my final year. Now I live several hours away from there, and that's ok, because my career path (which changed a little bit, I believe for the better in the long run, in my final year) is just as doable from here as things stand.

In your daughter's final year at uni, she'll be well served to apply for a number of graduate jobs. Applications start from late August or early September as a general rule, for an intake the following September (though you can sometimes defer by a year). They're often pretty competitive, so you can be great but not selected that year. A lot of grads re-apply the following year, for instance. People apply to several so they'll have backup plans, and often these schemes are nationwide, but not always - and even the nationwide employers like grads to be flexible, so they can give them six months exposure to a certain department in one city, then nine months in another department in a different part of the country. You can certainly request only to be placed in a certain region or city, and some people do, but it could be a limiting factor (doesn't have to be, but could be). Some grads find amazing internships abroad, or even move overseas to pursue their careers. Even during uni, there's often chances to study abroad on a special scheme. These opportunities are much harder to chase if you're tied geographically.

Financially it can be very sensible to buy a home, and it's been incredibly fulfilling for me to finally own my own home, a long-held dream of mine. I took a 7-year fixed rate, and even knowing I was where I wanted to live for the long-term, I had to take a breath - it felt a bit entrapping, I suppose, or at the least extremely committing, to say I'd certainly live somewhere for that long.

Your daughter's experiences may be different to mine, and this isn't to say what you or she should do. It's simply to say that, even as a person whose entire immediate family is educated to degree level (and often significantly above), and also own their own homes, I massively underestimated the time and energy commitment of both studying and buying a home.

If you and she wanted the advice of this internet stranger, it would be to put the money somewhere useful (high interest savings perhaps), save what she can from her student loans, take every opportunity she wants from uni, get a grad job (and join the pension scheme day zero), wait 6-12 months in whatever permanent role comes of that to make sure she's happy in it, and then look to buy a home that's a nice distance from that job, and in the kind of area she could get another job easily if she needed it. And if she wants to take a gap year, maybe defer that grad job a year first - the world is wide and wonderful, and it's easier to experience when young, before big commitments like a mortgage (or career, relationship, children, etc).

If you'd both like views from students about this, you could also post on a student forum like The Student Room to get views from students about this, or even do a search to see if there's already some posts about it.

I appreciate this isn't in line with your initial thinking on the topic, but I hope some of it is useful to you as an insight into one person's experiences with this topic.

I wish your daughter all the best of luck with her studies. 🍀🌠📖📒

silvercar

If you want my "why we didn't do it" story.

Also Manchester. I have 2 kids, 4 school years apart in age. DS2 is a ManU fan and always said that going to Manchester Uni would be a dream. We ignored this as kid talk.

DS1 started a 3 year degree in Manchester. He stayed in halls in the first year and suggested that buying may be something to do for year 2 onwards. He let us know that as early as the beginning of December students were forming groups to rent together next year, so we either needed to move quickly which would mean an empty property for 6 months. As student land in Manchester is virtually only students, so letting mid academic year is tricky. The alternative would be to buy in time for year 3, let DS1 stay there for 1 year then rent it out and see what happened with DS2. The idea of buying just to save one year's rent is stupid and having seen some of the houses they stayed, they were really awful, not the sort of property I would want to maintain from a distance.

What actually happened was that DS1 did a 3yr course followed by a 1 year masters. DS2 then did the same! In hindsight we should have bought before DS1 went to uni, rent it out for a year, while he did halls for a year and then he would have had somewhere to stay for 3 years; repeated for DS2.