Mortgages For Student Lets
If you require a mortgage or remortgage for student accomodation then our buy to let mortgage experts can help. They have access to the whole BTL mortgage market and will find, compare and arrange your mortgage for free.
Recent mortgage Q&A
Are student lets and accommodation the best investment solution for new landlords?
Sending children off to university is becoming more and more expensive, and some parents have decided to solve the problem of cost, particularly when it comes to student rent, by becoming student landlords. This seems like the best way to encourage your children in school, and also have a rental property that you can keep an eye on. For parents spending hundreds of pounds a term on rental payments, investing in student lets and accommodation can sound like a great idea.
Many homes around universities are already converted into a range of apartments and communal spaces, so getting a mortgage might be easier than for unconverted house. Finding a mortgage will often involve calculating the risks and rewards of investing in student accommodation.
Why student accommodation is a popular investment for new landlords
If you have no experience of being a landlord, then renting out to teenagers might not seem like the ideal place to start. The first rush to purchase this accommodation occurred during the rise in house prices, when student rents were increasing at a much higher rate than any other kind of rentals. Universities had no money to build new ‘halls of residence’, so students were often sent out to approved student accommodation in their first year. Parents and entrepreneurs both saw a way to make a little money by investing in these properties.
The trend has also been given impetus by the fact that professional investment companies have been advising their clients to put money into student accommodation. They have seen it as a lucrative and important way to get back high returns on savings. It is not only English investors who have taken this advice – pension companies in Holland have recently purchased more than 25,000 student apartments in the UK.
Will I get money back on my investment?
If you are interested in renting out student accommodation as an investor, then you should first research what you can expect to receive from each bedroom in your student accommodation. This will tell you what you will receive in total, and you can then work out how much of this you will be prepared to spend on a building. If you need to take out a mortgage, then you will have to include that in your calculations before you work out your profit. You will also need to remember that student accommodation is often used during the term-times only. This may mean that you are only collecting rents between 35-40 weeks a year, rather than 52.
Are mortgages easy to obtain?
Another issue you need to resolve before you invest is that of raising a mortgage. Many high-street lenders will not offer mortgages for student lets and accommodation, and you will instead have to take out a mortgage with a more specialised lender. As a consequence of this, you may have to pay a higher rate of interest on your mortgage. This can sometimes eat into your final profits, meaning that you may not get a significant return on your borrowing. Before you invest money in any student accommodation, it is vital to enter the process with your eyes open, so always research property investments carefully.
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