Students join the home-owning classes

Students join the home-owning classes

Nicola VenningLast Updated: 10:47AM BST 07 Sep 2006

One of the flats in Artillery House
Renting near universities can be expensive, but Nicola Venning says buying for your children can earn you top marks
Children are expensive. And they do not get cheaper when they go to university, especially at this time of year, when thousands of students face a scramble for decent, reasonably-priced digs in London before the start of the university term.
More than 173,000 students live in London, according to the Higher Educational Statistical Agency. And 42 per cent of them must live in private accommodation, so competition for flats can be fierce. "Flats go within two weeks, and by October, people are desperate," says Alex Koch de Gooryend, a lettings manager with Knight Frank.
Rather than run this gauntlet, some parents decide to buy a home to let to their student children.
"We are seeing more and more instances of parents buying for their student offspring," adds Nik Madan, lettings director with John D Wood. "I'd say it's doubled in the past five years, partly because rents, particularly in London, are creeping up higher and higher. Also, many parents buy directly in their children's names to avoid inheritance tax."
Drasco Vasiljevic, a 52-year-old meteorologist in London, has just paid £250,000 for a studio flat in Chelsea Wharf for his 19-year-old daughter Jelena, who will use it when she starts her second year at the London School of Economics this autumn.
"Prices to rent were about £250 per week in this central area, about the same as a mortgage, so I decided to buy," Vasiljevic says.
Jelena adds: "It's a good idea, particularly if I stay in the city after university."
But beware... every student loves to party. Madan recalls a three-bedroom home in Richmond. "The owners' son and his friends trashed it," Madan says. "They were unable to let it."
But avoiding party animals is only half the challenge. You need to think clearly. "You are making a long-term investment," cautions Tim Hyatt, lettings manager with Knight Frank. He suggests buying into a new build scheme offering a two-year rent guarantee that would cover any void periods.
Berkeley Homes, for example, is selling Loft Apartments in the former Ministry for Pensions Building in Acton, West London: two-bedroom flats start from £299,950. And in Woolwich, south-east London, you can pick up a one-bedroom apartment in the redeveloped 19th century Artillery House at the Royal Arsenal from £250,000.
Whatever you do, though, stick to the golden rules of buy to let: invest in an emerging area with decent public transport and reasonable amenities.
"Affordable areas east of the City, such as Newham, Limehouse, Stratford and the Royal Docks (where one-bed flats start around £200,000) are worthy of note," says Richard Davies, lettings director with Chesterton.

http://www.telegraph.co.uk/property/3352474/Students-join-the-home-owning-classes.html