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 11 years ago 22

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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.

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Jay James

14:49 PM, 19th August 2013, About 11 years ago

It is precisely because I read the "student mortgage" words that I enquired.
As a mature student, I wish to become a LL once again upon graduation, though this is not certain.
Putting it off until graduation was because I did not think it possible to find finance whilst at university.
There are issues with the parental collateral and parental guarantees (I would require a 100% mortgage),

Jay James

14:54 PM, 19th August 2013, About 11 years ago

Reply to the comment left by "Jay Jay" at "19/08/2013 - 14:49":

last message uploaded incomplete in error
add: at my age, going cap in hand to OAP parents seems odd.
However, I carry no debt beyond students loans and have £110,000 assets.
Being a resident LL was the only way I anticipated getting back into property, though it is well understood that to grow a business, being a non resident LL is necessary.

Mark Alexander - Founder of Property118

15:28 PM, 19th August 2013, About 11 years ago

Reply to the comment left by "Jay Jay" at "19/08/2013 - 14:54":

Hi Jay Jay

I understand the problem. It is quite a niche product, probably not what for you based on what you've said I'm afraid 🙁

Jay James

15:33 PM, 19th August 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "19/08/2013 - 15:28":

I had hoped that having a property worth about £110,000 / £115,000 with no mortgage, would help to secure finance.
I may yet enlist parental help (they are each in a strong financial position) if that is the only way to get started.

Mark Alexander - Founder of Property118

15:47 PM, 19th August 2013, About 11 years ago

Reply to the comment left by "Jay Jay" at "19/08/2013 - 15:33":

Have a chat with Howard - see his member profile here >>>

I doubt this is the scheme for you but if anybody can help you, it will be Howard 🙂

Janet Bloggs

20:08 PM, 24th April 2014, About 10 years ago

Just wondering whether this is still available? I am a student and would be very interested in becoming a resident landlord

Mark Alexander - Founder of Property118

17:52 PM, 25th April 2014, About 10 years ago

Reply to the comment left by "Janet Bloggs" at "24/04/2014 - 20:08":

Yes, have you filled in the contact form above?

Sustainer -

17:48 PM, 26th April 2014, About 10 years ago

This is a very tax efficient option for students who's parents can act as a guarantor, and a pretty good bet for parents who may otherwise be on the hook for three plus years of rent. It's not for everyone, but several of the smaller building societies are still offering this (Harpenden, Bath, Holmesdale etc) - you don't need a specialist broker to access the product.

vera cristescu

12:20 PM, 27th August 2014, About 10 years ago

How could I buy a flat in London for my son who is student at Westminster University?

Mark Alexander - Founder of Property118

12:36 PM, 27th August 2014, About 10 years ago

Reply to the comment left by "vera cristescu" at "27/08/2014 - 12:20":

Completing the contact form just below the main article (see above) would be a good starting point 🙂

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