New research from Direct Line for Business suggests that around 280,000 parents of teenagers are hoping to purchase a property for their child to live in whilst at university.
The most popular reason (40%) for putting a child on the property ladder is to provide a safe and stable environment to live in. However, financial motivation is also a driver of this trend; 25% of parents are hoping for regular income from the property and 17% are hoping for capital returns.
The insurer says that with high tuition fees and increasing living costs, it is no surprise that parents are looking towards alternative forms of income to support their children at university. The research highlights that 17% of parents also see property as a way of reducing the cost burden for their children living away from home at university through saving money on rent.
Research from Direct Line for Business reveals that 26% of university students are currently living in accommodation owned by themselves, family or friends.
Jazz Gakhal, director of Direct Line for Business, said: “It’s great to see that parents are seeing opportunities to help their children get a first step on to the property ladder and create additional income through buying a property for their university bound children.
“However the ownership arrangement of the property needs to be made clear from the outset. Parents should remember that if their child is letting out rooms to friends, it is the parent that will become the landlord. Parents who believe they may be in this situation should first check with their mortgage provider to see if this is allowed. They should then educate themselves on the regulations and liabilities surrounding student lettings.
“Parents should also consider landlord insurance, particularly because they will have a duty of care not only to their child but also to their child’s friends. Home insurance is not tailored to your needs in the same way as landlord insurance when renting out a property. Home insurance therefore may not provide you with the appropriate cover for injury to tenants, damage to other properties or cover for loss of rent resulting from fires, storms and floods.”
To help landlords keep track of charges paid, ongoing expenses and to assist in calculating the yield on their portfolio Direct Line for Business has launched a new landlord app, Mobile Landlord. This app enables landlords to manage up to five properties on the go through a single online, mobile portal. Mobile Landlord is free to download and available immediately on both iOS and Android.