Research conducted by the broker has found the capital appreciation of the property over the three-year period their child is studying will cover the cost of renting and provide them will a decent profit if they sell up when they graduate.
With property close to highly sought after institutions, investors can continue to rent to other students once their child has left and provide themselves with a good long-term buy-to-let investment.
Lee Grandin, managing director of Landlord Mortgages, commented: “With stiff competition for rented accommodation in university towns, investors are faced with a captive audience, meaning that this type of buy-to-let investment can prove to be highly profitable. More than anyone else, it is the student who knows exactly what their peers want, and in their child, parents have the most qualified researcher.”
While a profit of almost £20,000 is achievable in London, other university towns such as Bath, Bristol and Warwick and also provide decent returns of £13,662, £10,262 and £7,183 respectively.
Landlord Mortgages also pointed to other advantages of buying a university property, such as providing security for their child in terms of rent and the condition of the property.
Grandin added: “It is true that property prices are high, particularly in London. However there is still definite scope for profit, with predicted house price growth and steady rental yields.”
Jonathan Cornell, technical director at Hamptons International Mortgages, said: “For affluent parents who have the disposable income then it’s definitely an option. However, with property prices reasonably buoyant and not rising rapidly, investors are looking over the medium and long-term so parents who look to sell after three years shouldn’t expect to make a quick buck.”
