Buying a Flat for Student Daughter To Live In

Sarah1Mitty2

JamboWeb65 said:

Hi, thanks already for all the comments - really helpful.

The plan is instead of renting for 4 years, we buy and then sell in 4 or 5 years.  The money is part of my pension lump sum so I'll need it back. 

We have been in the situation where for various reasons she has been renting in Edinburgh, whilst she did her first degree for approx 5 years, so around £50k already spent in rent.  We would rather avoid the rent and instead forfeit any interest for savings.

I suppose what we are thinking is no more rent, my daughter will have a base (her degree may mean travelling to other areas of Scotland) but if there is a legitimate way of avoiding Land Transaction Tax, Council Tax etc

Thanks again   

      

Depending on how big a part this idea could just be very risky or just downright terrible, in my opinion of course. The £800 pm for rent previously could have been reduced with a flat share or living in a cheaper area, and with interest rates rising couldn`t you give savings interest to your daughter as a part-payment towards rent and have her pay the rest for a cheap rental (should be plenty in Dundee?) from a part-time job?

macman

If you do decide to gift her the money, she is of course under no obligation to then spend it on the purchase of a flat. Just saying...

Sarah1Mitty2

JamboWeb65 said:

_Penny_Dreadful said:

jonnydeppiwish! said:

Is there any reason why your daughter doesn’t get a student loan to cover it rather than you pay for it? They are choosing to do a second degree

Student loans are generally only for your first degree. You don’t get two bites of the cherry. 

Thanks both re this.  The type of degree she is doing means she will receive some funding which should cover living expenses.  The cost of the degree is also funded so its really only accommodation and travel - sorry don't want to get too specific but thanks again.  

A second degree will only be one or two years? not really worth buying a flat for IMO, and see the comments about landlords bailing out in another post, do you really want to be a landlord when your daughter leaves the flat?

Sarah1Mitty2

Did you buy the flat OP?

christianick

user1977 said:

She could buy it in her name with your money (you could set it up as a loan if you wanted), which would save on the LBTT (assuming she doesn't also own a property!).

yeah, I guess this is the best option and it simply has no disadvantages
the only thing is that he should consider his daughter's long-term plans and whether owning a property in her name aligns with those plans. It's important to discuss and consider the potential implications of property ownership on her future goals and financial situation.

Flugelhorn

Sarah1Mitty2 said:

JamboWeb65 said:

_Penny_Dreadful said:

jonnydeppiwish! said:

Is there any reason why your daughter doesn’t get a student loan to cover it rather than you pay for it? They are choosing to do a second degree

Student loans are generally only for your first degree. You don’t get two bites of the cherry. 

Thanks both re this.  The type of degree she is doing means she will receive some funding which should cover living expenses.  The cost of the degree is also funded so its really only accommodation and travel - sorry don't want to get too specific but thanks again.  

A second degree will only be one or two years? not really worth buying a flat for IMO, and see the comments about landlords bailing out in another post, do you really want to be a landlord when your daughter leaves the flat?

Maybe she is doing graduate entry medicine? 

ayupmeduck

if it's healthcare or STEM then you can get funding for a second degree, all 3 years (excluding medicine)

sheramber

Sarah1Mitty2 said:

JamboWeb65 said:

_Penny_Dreadful said:

jonnydeppiwish! said:

Is there any reason why your daughter doesn’t get a student loan to cover it rather than you pay for it? They are choosing to do a second degree

Student loans are generally only for your first degree. You don’t get two bites of the cherry. 

Thanks both re this.  The type of degree she is doing means she will receive some funding which should cover living expenses.  The cost of the degree is also funded so its really only accommodation and travel - sorry don't want to get too specific but thanks again.  

A second degree will only be one or two years? not really worth buying a flat for IMO, and see the comments about landlords bailing out in another post, do you really want to be a landlord when your daughter leaves the flat?

OP's first post says 4-5 years.

dharm999

we we bought a flat for our son when he went to university, and to be honest, it was the best thing we did for him.  It gave him a base for the duration of his course, and he didn’t have to go through the issues of having to move every year and deal with landlords, etc..  He decided to stay in the city post graduation and the location is only a few minutes from where he works.  We bought it and split the ownership between the three of us, and the intention is that it will be his eventually, so gives him a decent deposit when he decides to move somewhere else. This was before the second property stamp duty came in, but even if it was in force back then I think we would done the same.  The long term stability it’s given him outweighs the cost

Sarah1Mitty2

dharm999 said:

we we bought a flat for our son when he went to university, and to be honest, it was the best thing we did for him.  It gave him a base for the duration of his course, and he didn’t have to go through the issues of having to move every year and deal with landlords, etc..  He decided to stay in the city post graduation and the location is only a few minutes from where he works.  We bought it and split the ownership between the three of us, and the intention is that it will be his eventually, so gives him a decent deposit when he decides to move somewhere else. This was before the second property stamp duty came in, but even if it was in force back then I think we would done the same.  The long term stability it’s given him outweighs the cost

Different market now, Dundee will likely be hit hard by rising mortgage costs, the flat could just become a money pit, and remember they are using  * Retirement Savings * which they have stated that they obviously "need to get back" , an illiquid asset with the borrowing cost for that asset rising is not the place for retirement savings.