by Mark Johnston
Although many young adult have no way on getting onto the UK property ladder, many of their parents are taking advantage of lower houses prices and better mortgage deals.
Agents have seen a surge in parents buying flats and first time buyer property in traditional university cities such as Manchester, Leeds, Bradford, Sheffield and Birmingham.
The property tends to be on the lower end of the market where some of the falls have been the greatest, in the last two years the market in these sector has seen up to a 40% fall giving parents with buying power an opportunity to invest which many believe is more cost effective then renting university halls of residents.
Chesterton Humberts a London based estate agents said: “London and other university towns are filling up with parents from both the UK and overseas seeking student flats. Renting an apartment during university years is seen by many as dead money.”
The property firm Savills have seen Lancaster, Leicester and Loughborough as providing the cheapest flats in the UK whilst terraced houses are cheapest in Durham, Birmingham and Nottingham.
Lucian Cook at the property firm says “it is important for parents to compare the price of terraced houses with flats before considering a purchase. In Birmingham, the cost of buying a terraced house is actually 30 per cent cheaper than buying a flat,”
The property search engine Zoopla publishes a rent vs buy index that compares asking prices with rents to show which one is the cheaper. Current buying is better than renting in around 75% of the country although older university towns such as Oxford, Cambridge and Bristol are still the most expensive for those looking to buy. In Nottingham, Birmingham and Cambridge its still better value to rent than to buy.
Savills spokesperson says “when weighing up a decision, parents should consider the availability of university halls of residence”.
In Cambridge, Warwick and Lancaster most students live in halls (around 75%) whilst in Sheffield, Leeds and Nottingham only around 20% live in halls with the rest renting from private landlords.
Liam Bailey, head of residential research at Knight Frank says: Student demand has emerged as the key driver of the private rented sector in the three key northern cities (Sheffield, Manchester and Leeds),” he says. “Developments close to the cities’ university districts are experiencing the strongest demand.”
Many analysts are predicting a further reduction in house prices and lenders are reducing their mortgage rates to compete in a difficult market it might be the right time to buy for parents looking to sent their children to university especially in the north where the yield is much higher.
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