According to a Property118.com article from October 2016, an increasing number of parents are purchasing buy-to-let properties to rent to their children.
The landlord-oriented site said that a quarter of a million parents are letting houses to their children, and a further 1.4 million parents are considering purchasing buy-to-let properties for their offspring.
A quarter of parents say that they rent accommodation to their offspring as they are unable to afford to purchase their own homes. Half the parents said that they want to assist their children to leave the family home, but live nearby and in safe and secure accommodation.
Only 5% of parents charge the market rent to their children. Many see low rents as providing the opportunity for their children to save for a deposit to purchase their first home. After the children leave the rented property to own their own home, the property can be sold or rented out at the full market rent.
A spokesperson for the website said:
“Landlords who are parents have a great opportunity to help their children take their first steps on to the housing ladder by saving money on rental costs.”
Renting to children is not without its risks. The article reveals that some parents worry about children having parties where property damage could occur, and children and parents could have disagreements about rent.
Parents can apply through a mortgage broker for buy-to-let property purchases, whether for their children’s use or not. Many commercial mortgages are offered at notably low interest rates.
