In the past 6 years, student rent in the UK has risen by nearly a third to £6,366. Unsurprisingly, the average is higher in London at £8,875, and it is £5,928 across the rest of the UK. An investigation by the Huffington Post UK has found that between 2008 and 2018, the cheapest student accomodation available at Russell Group universities rose by an average of 41%. For context, maintenance loans only increased by 13% in the same period. In fact, one in six of these universities offered no student accommodation with a rent price within the minimum maintenance loan. This rise has in large part been attributed to the rising standards of student accommodation. For example, in 2012 studio flats only accounted for 4% of all student accommodation. That figure now stands at 9%.
How can you avoid high student rent with a residential property search?
With students increasingly turning to their parents for help in covering the rent, we propose an alternative solution that pays in the long term. We believe that it is possible to avoid high student rent with a residential property search. By choosing to purchase a house for your child, you can combine lower monthly payments with the opportunity to recoup your money, either by letting out spare rooms to other students, or by selling the property. Here are three reasons why we think you should consider a residential property search when a child goes to university.
Cover The Mortgage By Charging Other Students Rent
If possible, we would recommend that you look for a house with multiple bedrooms during your residential property search, rather than a one bedroom flat. Whilst the initial deposit on such a property will be larger, you gain the valuable ability to let bedrooms out to other students. That way, you have the added reassurance that your child isn’t living alone far from home, and can generate enough additional income to cover the monthly mortgage repayments. Be aware that small box bedroom are less likely to attract students who prefer to have the space to study in their rooms.
The short nature of university terms mean that students can spend up to half a year living back at home. That’s a long time for a property to lie empty. Make the most of this opportunity and let the property out to holidaymakers or visitors to the university. In cities like London or coastal locations such as Bournemouth, there is good money to be made during the long summer break. Universities frequently play host to conferences, summer schools or foreign exchange programs, and their visitors need places to stay.
Excellent Return On Investment When Selling
If you’re looking for a return on your investment, choosing to conduct a residential property search and purchasing a property is a far better choice than renting. You’d be surprised at how much house prices can rise during the 3 or 4 years of an undergraduate degree! Research by Halifax showed that between 2014 and 2017 (the length of a degree), the average house price in a university town rose by £39,000. That’s an average house price of 22%- a substantial profit.
Greater Options Post-University
Once your son or daughter has completed their degree and graduated, you have a number of options available to you. You could either continue to let the property to a new set of students and generate a regular income that way, or make the decision to sell the property. The profit you earn from that sale could then be used as the deposit for that child’s next home, or even go towards the purchasing of a property for another child about to start their university experience.
Of course, if your child has managed to secure a job in the surrounding area, they may even wish to continue living in the property, taking over responsibility for the mortgage..
County Homesearch can help you find the ideal property for your child, close to a university and with excellent investment prospects, through our residential property search. Contact us on 0333 939 8300 to discuss how we can help you.