The benefits of student buy-to-let

The benefits of parents taking out a buy-to-let mortgage to help their children through university have been highlighted by Moneyfacts.

The firm says that buy-to-let investors will see positive financial and social outcomes if they buy a home and then let their child and friends live in it while they study.

Although the child does not pay rent, his or her friends do and this money is used to keep up with mortgage payments.

"Obviously it's going to be seen as a good investment from the parents' side of things. If you've taken a student's property [for] three or four years... they can convert it to a… student buy-to-let scenario and rent out rooms," commented Darren Cook, head of mortgages at the firm.

"[They can] change the actual funding of that asset or get rid of it a later stage. So it could be a short [to] medium-term investment.

"On the social side maybe it's just that independence, the security at university - they've got their own home and they have independence there," he continued.

Student buy-to-let properties are growing in popularity and it was recently revealed by the Association of Residential Lettings Agents (Arla) that student landlords have larger yields than landlords in the wider market.

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