Alexander Hall has highlighted the growing trend of parents stepping in to support their children at university by investing in a property close to their chosen study location, as the firm’s latest research shows that, of the top 100 UK universities, the University of Sunderland is home to the lowest average monthly mortgage cost, whilst Glasgow Caledonian University offers the largest saving between the average monthly mortgage repayment versus the monthly cost of renting.
Alexander Hall analysed the monthly cost of a mortgage across each postcode of the top 100 UK universities before comparing this with the average monthly rent to highlight where investing in property can make the most financial sense.
Growing trend in parental uni-let investors
Students have always faced a heightened level of financial hardship but this challenge has only grown larger in recent years, with increased university fees, the higher cost of living, and rising rental costs all putting an even greater financial strain on those who are already struggling.
As a result, Alexander Hall has seen an increasing trend of parents to invest in a property to help their child during their university years. In doing so, they alleviate the high cost of renting in favour of a more palatable mortgage payment and this approach not only represents a smart investment for the future as a potential university let, but also helps the child get their first foot on the property ladder and begin building equity while studying.
But which of the UK’s top universities offers the most affordable mortgage costs?
Most affordable university monthly mortgage repayments
The research by Alexander Hall highlights that the University of Sunderland ranks as the most affordable of the top 100 UK universities for mortgage market accessibility.
The average house price in the SR1 postcode, home to the University of Sunderland comes in at £59,454, with a 15% mortgage deposit totalling £8,918. With a mortgage loan required of £50,535, this means the average monthly full mortgage repayment comes in at just £275 per month based on the average mortgage rate of 4.21% over a 25 year term. There are also options available to buy a home for university let with no deposit.
Other universities offering strong affordability for students where the average monthly mortgage payment is concerned include the Teesside University (£361 per month) and the University of Aberdeen (£435 per month).
Biggest mortgage saving versus the cost of renting
However, when it comes to the biggest boost to affordability when comparing the average monthly mortgage payment to the average cost of renting, Glasgow Caledonian University is top of the class.
The average monthly cost of a mortgage repayment in the university’s G4 postcode comes in at £806 per month, £535 per month cheaper than the average monthly cost of renting at £1,341.
Other universities offering strong savings where the difference between mortgage and rent is greatest include the University of Strathclyde in Glasgow’s G1 postcode (-£502), followed by the University of Leeds in LS2 (-£488), Newcastle University (-£484), Newcastle University and Northumbria University (-£484), the University of Sunderland in SR1 (-£397), University of South Wales (-£396), Cardiff University (-£371), Nottingham Trent University (-£356), and the University of Nottingham (-£355).
Stephanie Daley, spokesperson for Alexander Hall, commented:
“Securing a place at university is something to be celebrated, and this September hundreds of thousands of first-time students will leave home to take that first step into the wider world.
Not only is it an understandably daunting experience living away from home for the first time, but it’s also one that comes with a significant financial burden due to the high cost of living and renting.
It’s for this reason that we’ve seen a growing trend of parents opting to help alleviate this strain by investing in a property for their child, and for many, this parental support is essential.
There are many ways parents can support adult children onto the ladder, for example through joint borrower, sole proprietor options or regulated buy to let which allow family members to live in the property or specific ‘buy for university’ products which don’t even require a deposit.
This allows students to access housing without overstretching on rent, benefit from the lower cost of a mortgage repayment, and start building equity in a property. It’s a practical way for students to get ahead while studying and helps them take their first steps on the property ladder before they’ve even graduated.
It’s also important to note that, whilst the wider cost of renting a property at university is often shared by multiple students within the same household, the same also goes for investing in a property for your child giving them the opportunity to let to other students, helping to further reduce the mortgage costs associated with the property.
For this type of lending, professional advice is paramount to ensure buyers take the correct mortgage type which allows the letting of multiple rooms in the home."
