Children behave-your parents might become your landlord
- 24th October 2016
- Buy-To-Let Property News
Parents using buy-to-let market to provide children with accommodation
More parents are set to use buy-to-let as a way to provide accommodation for their children and invest in the property market.
Research has revealed that approximately 730,000 parents are already letting properties to their children- with the majority charging less than market value or even no rent at all- and increasing numbers of parents are expected to do the same.
The rise in the number of parents using buy-to-let is part of a wider trend in the sector. In August purchasing activity in the buy-to-let market rose by 13% as landlords looked to increase their portfolios. Activity in the market is expected to remain high over the coming months.
Many parents choose to buy property and become landlords to their children, often charging them lower rents. This allows their children to save for their own future deposit on a property. When looking to offset costs, it is important to remember, though, any reduced or concessionary rents must be subject to the correct tax treatments particularly when looking to offset costs.
Buying properties in this way can also ensure that the children spend less time and money on their commute. For those parents with children moving to London to start new jobs or university for the first time this can be a reassuring thought. Parents will also have the added benefit of having a place to stay in London when they visit.
Stephen Ludlow, Chairman at ludlowthompson comments: “We’ve seen a real pickup in parents looking to buy properties in order to rent them out to their children.
“This has obvious benefits for the children, who can then save up for the future- especially in order to get onto the property ladder themselves. There are advantages for parents too- not only will they get peace of mind but when their children no longer need the property the parents will be left with a valuable investment.
"Many parents may not only rent to their children, but also to friends of their children who can lease a second room which has the effect of maximising returns."
We’ve seen a real pickup in parents looking to buy properties in order to rent them out to their children
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