Parents become landlords in Southampton

Barratt’s Southampton and Eastleigh developments are attracting interest from parents keen to invest in accommodation for offspring attending Southampton University or Southampton Solent University next year. Rented accommodation is one of the largest and least avoidable expenses for students and relatives alike so it is fast becoming a trend for parents to invest in accommodation for their children.

Figures published last year revealed that 83,000 of the 2.6 million second home owners in the UK were parents who had purchased a property for a child studying at university - an increase of 26 per cent since 2000.

Jodie Wincomb, Barratt’s on-site sales negotiator, reports: “The one and two bedroom apartments at new development Twyford Square on Twyford Road, will be ready for occupation next summer. And ready to move into now are a number of citipads, one and two-bedroom homes at Oceana Boulevard on Briton Street in the city centre. The properties are perfect for one person or two people sharing. We’ve had a number of enquiries from parents whose children will be attending one of the city’s universities next year or are currently in their first year.

“These parent landlords are planning ahead – they would prefer to invest in a stylish apartment close to the university than pay ‘dead money’ towards living expenses in student rented digs.”

Jodie said that it can make sound financial sense to purchase an additional home to let to a child rather than shelling out thousands of pounds on rent over three or four years, the usual duration of a university course.

And according to recent reports, buying a property in a key university town can provide a yield of up to 16.5 per cent over a three-year period, the usual length of a university degree course, and buyers can still make a profit when they sell three years later.

Also, new figures reveal that this autumn’s batch of students can expect to pay an average of £60 per week for rented accommodation, an increase of seven per cent on last year. University owned accommodation isn’t any cheaper – average weekly rental fees hit a high of £82 recently, a rise of 23 per cent in the last two years.

“The new trend of parental investment really does make sense,” Jodie continued. “Investor parents know their children are living somewhere safe. Also, a brand new apartment is low maintenance and comes with high energy-efficient ratings - so monthly utility bills will be lower.

“There are further advantages if the property is purchased in the student’s name as a main residence,” Jodie added. “It will not be subject to capital gains tax when the property is eventually sold, whereas if it is bought in the parents’ names, they will have to pay income tax on rental income as well as capital gains tax.”

Twyford Square is a unique new development of 161 one and two bedroom apartments located off Twyford Road near junction 13 of the M3 and adjacent to the River Itchen. Eastleigh town centre is a short walk away with high street shops and the Swan shopping centre. A short rail or bus ride will take you into Southampton city centre.

Oceana Boulevard is located just minutes from the city centre and adjacent to Dockgate 4, overlooking Queens Park and close to the waterfront. Southampton is a bustling place and the universities are located within easy access of the city centre.

For more information log onto Barratthomes.co.uk.