Publication date: 29 October 2025
Reading time: 4 minutes
If your child is planning to leave home for university, you may be thinking about buying a property for them. While it’s a significant financial commitment, it’s also an opportunity to provide security for your child and build long-term wealth.
This article covers areas you may want to consider and isn’t financial advice. Everyone’s circumstances are different so it’s always best to get your own legal or tax advice.
From a financial perspective, your mortgage payments have the potential to build equity in an asset, rather than seeing money disappear each month. Plus, depending on circumstances, your child may also save money compared to renting student housing from a landlord.
If you choose wisely, your property could increase in value over your child's study period and beyond. University areas often enjoy strong property markets due to consistent demand.
Ownership also provides stability and control that your child won’t get from renting: their landlord won’t suddenly sell up or hike the rent. You can also make improvements to the property, potentially enhancing its value while creating a comfortable environment for your child.
If you can attract additional tenants as well as your child, the extra rent may be able to help offset your monthly mortgage costs. A well-chosen student property with multiple rooms can generate substantial income, maybe even covering your monthly expenses.
If you’re ready to commit, there are several ways in which you could fund the purchase:
A simple example:
Let’s say your main home, which you own outright, is valued at £1 million, and you need to release £250,000 to buy the second property for your child.
Your lender would then take a charge over the entire property, but because you’re only borrowing a quarter of what it’s worth, you’d be borrowing at a loan-to-value of 25%, subject to approval.
Doing it this way also offers other benefits:
Drawbacks of this approach
Property ownership brings ongoing costs that extend far beyond the initial purchase price.
Some are upfront lump sums such as stamp duty plus the likes of surveying and conveyancing costs. Others are regular outgoings such as maintenance, repairs, insurance, and fees if you use property management services.
The student rental market can also be unpredictable. Demand varies between locations and academic years, and you may face void periods when rooms lie empty. Make sure you have money in reserve for these and any unexpected expenses. Typically, insurance policies can cover void periods for when the entire property is empty, but a reduced rental income from when a property isn’t fully let is a different matter, so be careful.
Student tenants can sometimes cause more wear and tear than professional tenants, leading to higher maintenance costs.
University property prices can be inflated due to investor demand, meaning you may overpay in the first place, limiting further capital growth. Additionally, if your child decides to transfer universities or circumstances change, you may need to sell at an inconvenient time or manage the property remotely.
Your property’s location is key. Research the area thoroughly, considering its proximity to campus, transport links, local amenities, and the neighbourhood's reputation. Some areas popular with students may be less appealing to future buyers or professional tenants.
Given the complexity of parental property investment, working with experienced professionals can significantly improve your chances of success.
You may wish to ask local letting agents for an insight into how the local market behaves. What do similar properties rent for? How quickly do they let? Are there seasonal variations in demand? Our branch colleagues have in-depth knowledge of their local markets and so can advise.
Purpose-built student accommodation might seem logical, but traditional houses or flats often offer better long-term investment potential and flexibility. You may be able to rent to non-students in future too. The UK government’s Renters’ Rights Act Opens in a new window includes different rules on evictions for some student tenancies which you may also want to consider when deciding whether to continue to rent the property as a student residence.
You may also want to look into the university's expansion plans and especially accommodation strategy. If it’s building extensive student housing, that could impact demand for private rental.