Parents with children at university may be considering whether it is worth buying them a property while they continue their education.
If they do go ahead with such a purchase, they’ll be joining the 1.4 million so-called ‘parent landlords’ who are willing to take on their children as tenants, according to the latest research.
The findings by the Post Office found that 730,000 have already bought a second property to rent to their offspring.
It claimed that the numbers stem from a concern about how the younger generation can afford to get on the property ladder amid a rise in house prices.
While some parents choose to help with a deposit - with 12 per cent of first-time buyers expecting support from the Bank of Mum and Dad - others explore the idea of buying a second property for their child.
The research found that 26 per cent of parents rent a second home to children who are unable to get on the property ladder, while 24 per cent do so to help them save money.
Other reasons for buying a second property for their children include wanting to provide a safe home and wanting to keep their children close by.
However, parents are not just motivated by helping out their children - some believe that buying a property for them at university can be an investment for their own future, while 21 per cent simply want to avoid their children living at home longer than is necessary.
The research went on to reveal that parents are generous landlords, with only five per cent charging the market rent to their children.
John Willcock, of Post Office Money Mortgages, said: “As both the cost of renting and buying a property increases, homeownership remains a distant dream for a significant number of today’s younger generations. With many parents wanting to do as much as they can to help their children, this is a challenge that affects the whole family.
“Our research shows that an increasing number of parents are considering buy-to-let both as a means of helping their children, and of securing their own financial future. By becoming a ‘parent landlord’ they are able to provide this support - without necessarily having to compromise on their own space at home.
"This not only provides their children with the opportunity to save for the future, but can act as an investment can help with their own long-term financial planning.”
From a tenant’s perspective, there are numerous benefits to having Mum or Dad as a landlord, with 42 per cent of children expecting to pay less in rent than they might otherwise have to. Meanwhile, 38 per cent look forward to having someone helpful to assist them with any property problems.
However, being a ‘parent landlord’ doesn’t come without its drawbacks.
30 per cent worry about clashes regarding rent, while 24 per cent question how well their child will take care of the property. There is also 19 per cent who worry about the home being used to host parties with friends.
Have you bought a second property for your child? Let us know below.
15 July 2015 • 2-minute read
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