9 March, 2017
With the average age of a first time buyer of Residential Property in the UK now being 37, it is perhaps hard to believe that students in full time university education, can obtain mortgage finance to enable them to purchase their first property to live in during their time at university, rather than having to rent student accommodation.
“Buy for Uni” mortgages are apparently the way forward and can allow students to borrow up to 100% of the value of the property they wish to purchase. As always, there is certain criteria surrounding this type of mortgage but here is some of the information:-
The lender is likely to allow the Borrower to rent a room or rooms within the property to other students thereby providing additional income which can of course be used for the mortgage repayments. Any agreed rental agreement is likely only to be for a maximum period of 1 year but renewable annually, in the same way as other student let accommodation.
One of the other conditions attaching to the offer is that the monthly mortgage payments have to be made from either the parents’ bank account or an account in the joint name of the parents and the borrower.
One of the advantages of a purchase using this type of mortgage is that as the student is likely to be a first time buyer, they will not be liable to pay the higher level of stamp duty land tax for second home purchases, as their parents would have been had the property been purchased in their names.
Until today, I was not aware that this type of mortgage existed and despite the fact that the interest rate is slightly higher than that of a residential mortgage, the benefit to students is huge and potentially allows them to get onto the property ladder at a slightly earlier age than 37 and give them and/or their parents an income in the meantime in respect of any rooms rented to other students within the property.
Contact our Residential Conveyancing Solicitors