Buy To Let Updated:
The cost of renting is on the rise, but would it cheaper if you were renting from your own parents? Many children of property moguls will undoubtedly hope so, and with the number of parent landlords on the rise, it's something more and more will (hopefully) be benefiting from.
Research from Post Office Money shows that an estimated 1.4m parent landlords are willing to take on their children as tenants, and some 730,000 already rent properties to their offspring. This figure could rise in the future, as with ever-rising house prices putting homeownership increasingly out of reach for many younger buyers, a growing number of parents are looking for alternative ways to provide assistance.
Many choose to help their offspring with money towards a deposit – 12% of first-time buyers expect this kind of help from their parents – while others take it one step further and buy a second property for their children to live in. The research found that 26% of parents who are already renting to their offspring do so as their children are unable to get a foot on the ladder themselves, while 27% want to provide them with a safe property and 24% do so to help them save money.
Others have slightly less altruistic motives, however, with 25% of parent landlords surveyed buying the second property as an investment for the future, while 21% admitted they simply wanted to avoid their children living at home any longer than necessary!
Ulterior motives aside, the fact that many parents are providing a rental home for their children should hopefully enable them to get on the property ladder sooner, particularly given how generous many parental landlords are. Indeed, just 5% charge the market rate, while 30% allow their children to pay whatever they can afford and 12% even go so far as to pay the bills for the property.
"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," said John Willcock of Post Office Money Mortgages.
"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 and help with their own long-term financial planning."
Considering buying a home for your children to live in? Make sure you find the right buy-to-let mortgage to suit
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