Student Buy to Let – 100% mortgages available to students!

Student Buy to Let – 100% mortgages available to students!

12:46 PM, 16th November 2012, About 12 years ago 22

Text Size

Seriously, this is NOT a wind up! Our regulated mortgage broker of choice has informed us of a deal that he’s done with a lender which allows students to invest into a buy to let property worth up to £250,000 with NO DEPOSIT. What’s more, the lender is offering a 0.25% discount off their standard variable rate for the first two years. 

I can assure you this is absolutely genuine, both myself and my business Partner Neil Patterson have double checked this with the mortgage lender directly. They are a very credible and established mortgage lender too.

Obviously there is criteria involved, the key principles of which I have outlined below.

Who can apply for this mortgage? 

The mortgage is available to students in Higher Education throughout England and Wales. An application can be made in the sole name of the student, or jointly between the student and their parents. In the case of a sole application, the lender will require a parental guarantee.

Maximum loan

Up to 100% of the value of the property, subject to a maximum £250,000. The actual amount you can borrow will depend on the income that will be received from letting rooms within the property. Where this is insufficient rental to support the mortgage, the lender will consider parental income after deductions for financial commitments.

What Security is required?

The lender will require a first charge over the property to be purchased. Additionally, on loans greater than 80% of the value of the property, the lender will also require a collateral charge over the residential property of the parents.

Why would students want to become landlords?

We expect these mortgages to be very popular with students who want to buy a two or three bed flat or house to live in and rent out the spare room to their friends. There are massive tax breaks involved in this too as rent collected for renting out rooms in your own home is tax free for the first £4,250 a year regardless of any other income or tax allowances.

What sort of property is acceptable?

The property must be in England or Wales and must be located within a 10 mile radius of the university attended. The property must have no more than four bedrooms. There are specific properties the lender will not consider, such as ex local authority flats, or flats in blocks of more than 6 storeys.

Other criteria

The lender will allow no more than 4 occupiers, to include the mortgage holder. Tenancies must be granted under a Licence Agreement. The other tenants do not have to be students.

The lender recognises that the student letting market operates within specific time frames; students are often looking to secure accommodation in January or February for occupation at the start of the academic year in October. This may require a property to be bought in January or February in order to market it to sharers for the following academic year. With this in mind the lender will allow the property to be let under an Assured Shorthold Tenancy for a minimum period of 6 months provided it is then occupied by the student as their main residence by 1st October at the start of the next academic year.

For obvious reasons, our recommended mortgage broker does not want us to disclose the details of this lender. He expects to be flooded with applications but also doesn’t want other brokers to get in on this as the lender may withdraw from the market once they have hit their targets.

Therefore, if you are seriously interested in finding out more, please complete the form below and we will pass on your details to our recommended broker so that he can make contact with you. When you submit the form we will link you through to our recommended mortgage brokers profile page on his website.

Also see our article on on how to find good lodgers.

Share This Article


Mark Alexander - Founder of Property118

14:08 PM, 27th November 2012, About 12 years ago

Our recommended broker has reported receiving over 60 enquiries since this post went live just last week. He's going to be a very busy man when word gets around about this scheme I reckon!

Mary Latham

12:03 PM, 4th January 2013, About 12 years ago

Mark I am very interested to know how many people have done this and if it is still available?
Follow me on Twitter@landlordtweets

Mark Alexander - Founder of Property118

13:07 PM, 4th January 2013, About 12 years ago

Hi Mary

The scheme has been in operation for just over two years. This article alone has produced nearly 500 referrals to the broker. I don't know exactly how many deals have completed since the scheme was launched but I believe it runs into 10's of millions of advances. What I do know is that they are quite picky as they are targeting the top 5% of society, i.e. students with parents who are high rate tax payers who have small of no mortgages left to pay on their own homes.

Ewan Foreman

15:51 PM, 27th January 2013, About 11 years ago

It is now widely recognised that irresponsible lending and irresponsible borrowing played a very large part in the current financial crisis. Perhaps others see giving excessive levels of security in exchange for excessive levels of borrowing as wise and responsible. I do not.

Mark Alexander - Founder of Property118

16:54 PM, 27th January 2013, About 11 years ago

What you are describing Ewan in Pawnbroking. Are you suggesting thats what this scheme is? If so, I disagree but would be interested to hear why you think this?

Ewan Foreman

13:41 PM, 30th January 2013, About 11 years ago

Mark, thank you for your direct and open response. In answer to your question: No lender will offer a 100% mortgage without generous amounts of security in return. The circumstances under which it is wise to offer security over the mortgaged property + additional security in the form of PG's or security over an additional family home in order to get 100% funding to buy a property that you otherwise can't afford are non-existent in my experience. The requirement for a 100% loan implies that the borrower has limited cash reserves. Promoting 100% loans to students therefore does little to suggest that we have all learned to stop living beyond our means and start addressing our £1.1 trillion UK debt figure.

andrew townshend

9:34 AM, 18th August 2013, About 11 years ago

Reply to the comment left by " " at "30/01/2013 - 13:41":

while i agree with much of what you say, the fact remains that fools that take on excessive debt that they cannot afford have absolutely no one but them selves to blame when things go wrong, we are all adults and responsible for our own actions .

Jay James

20:27 PM, 18th August 2013, About 11 years ago

Hi Mark
Do you know if this mortgage product is still available?

Jay James

20:31 PM, 18th August 2013, About 11 years ago

Hi Mark

Do you know if the mortgage product at the page heard is still available?
Separately, the header also mentions the required use of licence agreements.
Whilst I have a broad idea of what these are, I do not understand them.
Can an individual LL implement these, or is it just for institutional LLs?



Mark Alexander - Founder of Property118

22:17 PM, 18th August 2013, About 11 years ago

Yes it is still available but only to student, please read it again. A lodger agreement is a licence. Remember, this would be the student own home, this making the student a resident landlord

1 2 3

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now