Mortgage Clinic: 'Is it a bad time to buy a flat for our daughter?'

This summer, I had planned to get a £275,000 buy-to-let property in Bristol, where my student daughter and her college friends will live. But I'm confused. House prices are falling, yet I hear that rents are holding up well. Is our plan terribly ill-timed? Obviously, my daughter really wants the plan to go ahead. BF, Manchester

For wealthier parents, a buy-to-let for offspring at university is appealing. While rent from your daughter's friends should cover the mortgage, there's also opportunity for capital growth.

No student worth their salt would let a parent back away easily from such a generous offer, but it's what you want from your investment that really counts.

With prices falling in many parts of the country, whether to go ahead now depends largely on how long you plan to buy for – and if you're in it solely for a swift profit.

"If you're buying for the length of your daughter's degree course, that may prove too short a term to make the investment worthwhile," warns David Hollingworth of broker London & Country. "But if you intend to keep the property longer term and let to students beyond your daughter's stay, then it could still be worth it."

Brokers stress that, like all markets, housing is cyclical. There's a high risk that the going will be tough for some time, but it's likely that – in due course – the "correction" will end and prices will stabilise and rise again.

So, when will those prices rise once more? Your buy-to-let property would need to stay in the market until at least 2013 for you to ride out the rough, says Rob Clifford at broker Mortgageforce: "Think carefully about your objectives – if you're hoping to achieve a certain capital growth during the next couple of years, you'd be better off putting your money into a savings account. Unless you find a bargain property and hold it for five years, avoid buying right now."

Mark Harris at Savills Private Finance suggests 10 years as a guide for a minimum investment term, and warns that loans are increasingly expensive. "Fewer buy-to-let mortgages are available as a result of the credit crunch, and they require bigger deposits – at least 15 per cent and more likely 20 or even 25 per cent, with surplus rent to the mortgage payments," he says. So for your £275,000 property, you'll need a deposit of up to £68,750.

Harris adds that not all lenders will let you rent out to a family member, further restricting choice. On a brighter note, rents look set to remain buoyant thanks to high demand from thwarted first-time buyers and immigration, although areas with over-supply of "off-plan" flats are suffering.

Send us your questions and you could receive £50 to spend at Amazon

Foxed by jargon? Worried by the credit crunch? Email a question to We will not reveal your identity, and we cannot give specific advice. If your question is printed, you'll receive a £50 voucher from, so you can kit out your home with anything from a lawnmower to an espresso machine.

Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
footballShirt then goes on sale on Gumtree
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine